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February 29, 2008 18:51 IST
Last Updated: February 29, 2008 18:52 IST
The IT industry would have received 'a shot in the arm' if Finance Minister P Chidambaram had extended the tax holiday under the STPI scheme beyond March 31 2009, in his Budget on Friday, IT major Cognizant said.
"It would have been a shot in the arm for the industry, primarily because the IT industry has been consistently ploughing its earnings back into the business, resulting in higher investment and growth," Lakshmi Narayanan, Vice Chairman, Cognizant said.
"The small and medium sized companies will be the ones to be hard hit. These companies constitute a vital part of the IT ecosystem as they operate in specific niche areas, invest aggressively in innovation and also take the industry to Tier-II and III cities ahed of the rest of the industry," he said.
He also said that this segment of the industry deserved preferential treatment from the government, since the next big top-tier offshore player could emerge from this category in five to 10 years.
"No change in corporate tax implies that the rates have reached a stable and mature state-something that is hard to interpret, given that the economy is only in its early stages of accelerated, multi- year growth," he said.
He also commended the finance minister for commissioning a world class skill development program on a mission mode basis that would be a catalyst for all skill-dependent industries.
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