Indian IT firms are already reeling under pressure due to rupee appreciation and competition from across the world. A strategic maneuvering against these uncertainties has been foraying into tailor made IT packages for the domestic market especially for SME users. Last couple of years SMEs have been the focus for many small IT firms due to more and more SMEs in the manufacturing and non-IT sectors going for IT adoption.
India focused IT firms will certainly pass on this ED escalation to their clients. This is a major cause of concern since Indian SMEs are highly wary of the price factor resulting in a slow down in IT adoption. IT adoption is crucial for Indian SMEs to cut cost, gain speed and reach the global markets.
Keeping in mind the dual advantage from domestic IT usage, FM should either rollback the ED increase from 12% to previous 8% or exempt tiny & small units below 50 corers from paying ED.
Vinod Menon
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Mr PAV Menon???
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