Date:14/09/2004 URL: http://www.thehindubusinessline.com/2004/09/14/stories/2004091401361700.htm

Back Nasscom raps Karnataka for hiking sales tax

Our Bureau

Dr Kiran Karnik, President, Nasscom, addressing a press conference in Bangalore on Monday. - G.R.N. Somashekar

Bangalore , Sept. 13

THE National Association of Software and Service Companies (Nasscom), the grouping for software firms, has criticised the Karnataka Government's move to hike sales tax on IT products from seven to 12 per cent, earlier announced in the State Budget.

"The additional tax is a retrograde step. We are deeply disappointed," the Nasscom President, Dr Kiran Karnik, said. "The increased levy has come at a time when we are trying to improve IT penetration. Schools, homes and Government itself will need more computers and additional tax burden is unwarranted," he added.

Nasscom was in talks with the Government for an amicable solution, he said.

Criticising heavily the lack of initiatives to develop infrastructure projects to boost and spread IT across the country, Dr Karnik also pointed out the supply crunch of top end research and development professionals.

According to Dr Karnik, the country produces close to 5,000 PhDs annually, which was minuscule compared to 3.5 lakh engineering students graduating every year. Commenting on opportunities in the sunrise business process outsourcing industry, Dr Karnik said, "The industry has the luxury of hiring the best seven or eight, but when the industry needs to expand in the long run, they would find it difficult".

Nasscom is in talks with universities to improve syllabus, he added.