that seems to be the finance minister’s message to the IT industry. The IT industry, after growing at a phenomenal clip in the past several years, slowed down in 2009 due to the global economic turmoil. As the industry summons all its energy to get up on its feet and run again, it expected a little sympathy in the form of a deferral of the sunset clause that gives tax concessions under the STPI scheme.

Not only did the finance minister not grant any extension, but his commentary also seemed to indicate that such continued support to the IT industry is not affordable in the phase of fiscal consolidation that our economy is entering. While it can be debated if this will impact the global competitiveness of the IT industry, the growth of IT across the length and breadth of the country will surely be stifled, with the result that it will continue to remain somewhat elitist, operating mainly out of a few large metros in the country.

The much talked about imperatives of inclusive growth and bridging the digital divide can take shape only through access to digital products, advanced education and use of computer applications at the district and taluka levels. Broadband, a key enabler of inclusiveness, has been elusive. In the absence of such connectivity, it is important to encourage private players, both large and small, to take the IT revolution to many towns and cities aspiring to be on the global map. Unless a long-term visibility to the concessions is available, it is unlikely that these remote locations will receive the investments needed for an inclusive growth.

At the same time, it is gratifying to note that the government will be spending a lot more on computerising many aspects of tax administration, including customs and excise. The spend on the UID (unique identification) project, which has to be seen more as a spend on a database and technology, together with the new initiatives, will most certainly improve transparency and make the tax machinery more efficient. In the budget speech, the finance minister highlighted the importance of information technology in effective tax administration and financial governance system.

In an effort aimed at examining the technology and systemic issues related to multiple projects, such as Tax Information Network, New Pension Scheme, National Treasury Management or Expenditure Information Network, which are in different stages of rollout, the government has proposed the setting up a Technical Advisory Group.

The multiplier effect of such initiatives as Unique ID and e-governance cannot be underestimated. Both these initiatives have the potential to spawn new industries that will add significantly to the GDP growth. And this will drive all-round growth — not just software services, but also hardware, communication and broadband infrastructure.

The partial rollback of the stimulus packages, the clear roadmap on fiscal consolidation, and the multiple initiatives that the government has announced in the infrastructure, agriculture and financial sector also suggest that the economy is well and truly poised for the growth path. The disposable incomes that are sought to be put in the hands of the middle class through changes in the tax structure are likely to encourage more spends on hardware and software and enhance the overall IT penetration in the country.

If the takeaway is, “I don’t give you more money, but I will buy more from you”, I think our industry can live with it. What drives us is growth and job creation, whichever way they come.