Skilling needs more financial commitment

The entire IT ecosystem must be tuned to ensure that it is easier to do business in India. Many countries are now attracting technology start-ups that are working on the next big thing. India must not lose out in this race. India has been facing a flight of talent with several start-ups relocating to Singapore.

For multinational companies and large software vendors, transfer pricing is still a thorny subject. Though there has been a fair amount of movement on this front, it will be good if the Centre can nail the transfer pricing issue once and for all.

Imposition of Minimum Alternate tax (MAT) on SEZ units by Finance Act 2011 continues to be a pain point. Companies that are making big investments in SEZ’s would be more comfortable if the tax-friendly status of such units is restored. At the end of the day, investors want to see consistency in the taxation regime. More investments will happen if it can be established that the taxation framework will be stable for the next five years. When it comes to e-governance, there is a need to streamline procurement processes while ensuring that vendor payments are released in a timely manner. Efficient technology procurement by the Centre will propel Indian and foreign companies to seriously look at the ‘Digital India’ opportunity. The Centre must ensure time bound execution of all initiatives. For instance, in the last budget, a ₹10,000 crore startup fund was unveiled. Not much has been heard about it since then. How the different constituents of the Digital India campaign will be funded must also be highlighted by the Centre. The entire area of skilling also needs more financial commitment. India needs to upgrade the skillset of close to 200 million people in the next 5-6 years. The Centre should commit more resources to the STAR scheme of the National Skill Development Corporation. Once that happens, not only IT but all other industries will benefit.