Pathik Shah

I have been trying to make sense of the Union Budget 2010-2011 and here are the points which I think should affect the technology sector. There hasn’t been much in this budget for us technophiles though.

Key Features of Indian Union Budget 2010 – 2011

Computers and Mobiles

The Special Additional Duty of Customs (SAD) of 4% on imported mobile handsets has been fully exempted. This should lead to a slight fall in mobile prices if the manufacturers decide to pass on the benefit to the consumers.

The budget has also proposed to remove the 24% import duty on components imported for manufacturing batteries, chargers and other mobile accessories.

On the other hand, the central excise on all non-petroleum products has been increased from 8 to 10%, which may end up eroding the tax savings on technology products due to the above mentioned points.

IT

There have been no specific announcements made which should affect the IT sector directly but the UIDAI (Unique ID Authority of India) project has been approved and Rs. 1900 crores have been allocated to it. The project will most likely be handled by Indian IT companies so this should be good.

Also, Rs. 31000 crores have been earmarked for school education reforms in 2010-2011; which will probably be a boost for the IT sector in the long term.

One of the best things about this budget seems to be that both the GST and the Direct Tax code will finally be applicable by April 2011.

I’m still browsing through the whole budget document. Will update this post if I find anything relevant.