http://www.channeltimes.com/story/creating-opportunities/
The IT industry greeted Finance Minister P. Chidambaram’s Union Budget 2006 with mixed emotions - a few lauded the FM’s fiscal prudence while others were critical of his decision to impose additional excise duties. However, a month down the line, when the confusion clears it will be business as usual for the channel.
The excise duty and taxation issues can have an adverse impact on the IT channel in the short term. But several other measures announced by the FM will not only negate these effects, but can positively broaden the playing field for channel partners provided they get their act right.
Education is the key to increasing the IT penetration ratio in the country. As long as close to 50 percent of the country’s populace remains illiterate, the target market is restricted to that extent. For 2006-07, the allocation for education has been enhanced by 31.5 percent to Rs 24,115 crore. The allocation for primary education itself has been increased to Rs 100.41 billion. With this, the dream of introducing computer education at the primary school level itself has taken a step closer to reality and opened up a whole new avenue of profitability for channel partners across the country.
The government also has addressed the need to improve the quality of education imparted. The ITES industry already accounts for around 2 percent of our exports. Animation and multimedia can be the other sectors where we can carve a niche. But skilled manpower is the key. If the supply of quality human resource cannot keep up with the growth then we could lose our edge in the global market place. The government has shown foresight while announcing initiatives to improve and augment our human resource infrastructure and transform India into a knowledge society.
It has announced grants of Rs 50 crore each to three universities for specified research programs. A special grant of Rs 100 crore has also been allocated for Punjab Agricultural University in acknowledgement of its pioneering contribution to the Green Revolution. Last year, the FM had announced an unprecedented grant of Rs 150 crore to the Indian Institute of Science to help develop it into a world-class institution. These policy initiatives can prove to be a huge boon for channel partners.
The Union Government’s focus on developing our R&D capabilities is another business opportunity for proactive channel partners. The National S&T Entrepreneurship Board has set up a number of Technology Business Incubators with seed funding from the Technology Development Board and concessions from the government. Here again IT is going to play a key role.
The program to upgrade 500 ITIs over five years will serve a twofold advantage - it will make the country more competitive in terms of skilled manpower and this, in turn, will generate an additional demand for PCs and PC peripherals.
In addition to this, the allocation of Rs 1,500 crore from the Universal Services Obligation Fund to reach 250 million connections by December 2007 including 50 million rural connections will go a long away in ensuring widespread connectivity. This will not only boost economic growth in rural India, but will also open up additional options for channel partners.
The FM has also made provisions to address the power shortage problem with plans to add 34,000 MW under Tenth Plan and has announced plans to provide power to 10,366 villages in the current fiscal.
The government has allocated Rs 14,300 crore for rural employment. It has also announced several initiatives, which should see employment opportunities for skilled workers opening up in the manufacturing and services sectors. This means increased affordability in the coming days, a factor that often proves to be the key hindrance in tapping emerging markets.
So, while channel partners should raise their voice against unjustified tax regimes they should also look at the vast opportunities that have opened up due to the government’s largesse to other developing sectors.
The IT industry greeted Finance Minister P. Chidambaram’s Union Budget 2006 with mixed emotions - a few lauded the FM’s fiscal prudence while others were critical of his decision to impose additional excise duties. However, a month down the line, when the confusion clears it will be business as usual for the channel.
The excise duty and taxation issues can have an adverse impact on the IT channel in the short term. But several other measures announced by the FM will not only negate these effects, but can positively broaden the playing field for channel partners provided they get their act right.
Education is the key to increasing the IT penetration ratio in the country. As long as close to 50 percent of the country’s populace remains illiterate, the target market is restricted to that extent. For 2006-07, the allocation for education has been enhanced by 31.5 percent to Rs 24,115 crore. The allocation for primary education itself has been increased to Rs 100.41 billion. With this, the dream of introducing computer education at the primary school level itself has taken a step closer to reality and opened up a whole new avenue of profitability for channel partners across the country.
The government also has addressed the need to improve the quality of education imparted. The ITES industry already accounts for around 2 percent of our exports. Animation and multimedia can be the other sectors where we can carve a niche. But skilled manpower is the key. If the supply of quality human resource cannot keep up with the growth then we could lose our edge in the global market place. The government has shown foresight while announcing initiatives to improve and augment our human resource infrastructure and transform India into a knowledge society.
It has announced grants of Rs 50 crore each to three universities for specified research programs. A special grant of Rs 100 crore has also been allocated for Punjab Agricultural University in acknowledgement of its pioneering contribution to the Green Revolution. Last year, the FM had announced an unprecedented grant of Rs 150 crore to the Indian Institute of Science to help develop it into a world-class institution. These policy initiatives can prove to be a huge boon for channel partners.
The Union Government’s focus on developing our R&D capabilities is another business opportunity for proactive channel partners. The National S&T Entrepreneurship Board has set up a number of Technology Business Incubators with seed funding from the Technology Development Board and concessions from the government. Here again IT is going to play a key role.
The program to upgrade 500 ITIs over five years will serve a twofold advantage - it will make the country more competitive in terms of skilled manpower and this, in turn, will generate an additional demand for PCs and PC peripherals.
In addition to this, the allocation of Rs 1,500 crore from the Universal Services Obligation Fund to reach 250 million connections by December 2007 including 50 million rural connections will go a long away in ensuring widespread connectivity. This will not only boost economic growth in rural India, but will also open up additional options for channel partners.
The FM has also made provisions to address the power shortage problem with plans to add 34,000 MW under Tenth Plan and has announced plans to provide power to 10,366 villages in the current fiscal.
The government has allocated Rs 14,300 crore for rural employment. It has also announced several initiatives, which should see employment opportunities for skilled workers opening up in the manufacturing and services sectors. This means increased affordability in the coming days, a factor that often proves to be the key hindrance in tapping emerging markets.
So, while channel partners should raise their voice against unjustified tax regimes they should also look at the vast opportunities that have opened up due to the government’s largesse to other developing sectors.
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