The very fact that 55 per cent of India's economy is services based, it is difficult to foresee a sustainable growth in this respect in the long-term perspective without high levels of Internet penetration and usage.
That India's Internet is abysmally low in comparison and ranks amongst the most poorly-connected countries highlights the need for drastic measures to bring in significant government support to raise the levels of Internet usage.
This year's Union Budget, despite its macro-economic outlook, really fails to address a key segment such as Internet. Broadband Internet simply didn't figure on FM’s radar, except to highlight the enhancement of some Budgetary allocation of the department of information technology's national e-governance plans, most of which anyway have been in the pipeline due to earlier initiatives.
Three measures (as follows) that have been repeatedly demanded by the industry, and even backed by the regulator, have not been considered.
- Allowing individual assesses to avail tax deduction on the cost of purchasing personal computers: If given, it would encourage more people to make computers part of their personal lifestyle, and use Internet for productive purposes.
- Allowing costs of broadband/Internet usage to be made tax deductible: One of the banes of limited usage, or less than desirable usage growth is the cost of using the broadband services. Any allowance to offset the costs of usage would have made significant difference towards encouraging more people to use it more ubiquitously.
- Give service tax exemptions to cyber cafes: A majority of Internet access is done through cyber cafes, since they are looked upon as a cheap alternative to owning PCs for using Internet. More encouragement for them would have led to higher usage.
While wireless data cards have been exempted from excise duty and it is a nice gesture by the FM, but beyond that it would not help raising the broadband economy to any significant levels. We are grappling with issues of digital divide of a serious nature and just a couple of nice gestures don't help. Rather they mock.
In addition, more and more government information and services are put on the Net. So while the noble idea of the national e-governance plan is just that - and he announced some hike in allocation of DIT's budget - I think the need of the hour was to take some drastic steps, as listed above. That hasn't been done. It means that at the government and political level in India, there is no significant mindshare in determining that Internet affects the future of our economy, which is in sharp contrast to OECD countries.
I am happy for the telecom companies and the cable operators and the broadcasting companies who are launching DTH, IPTV, Mobile TV and such services as triple play, since they will benefit by reduction in cost of ownership. Telecom service providers planning to roll out new networks will gain significantly by taking advantage of the reduced costs of project import.
Telecom manufacturing too has some advantage with reduction of Cenvat rates.
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Autor(en)/Author(s): Amitabh Singhal
Quelle/Source: Indiatimes, 29.02.2008
