R Chandrasekaran, President and Managing Director, Global Delivery, Cognizant

1. The extension of the sunset clause on STPI (Software Technology Parks of India) by a year is welcome. While this will benefit the entire industry, it will specifically benefit the small and medium sized companies in the industry that needed this critical impetus for growth. This is also important in this turbulent global economic environment, in the context of emerging locations such as China, Philippines or Vietnam continuing to offer attractive tax incentives.

2. A substantially higher outlay for institutions of higher learning such as IITs and NITs should increase the R&D throughput and innovation quotient in a material way. At a time when industries are undergoing structural changes globally, it is innovation that can catalyze the next phase of growth. The support provided by way of subsidy for poor students pursuing higher education should provide the required impetus for enhancing the overall employable talent pool. The modernization of employment exchange under the PPP (private-public partnership) mode will help align skills with available employment opportunities at the national level and on a real time basis.

3. The abolition of fringe benefit tax is also welcome since the administrative hassle involved in FBT compliance was very high.

4. The clarity on transfer pricing assessments and the setting up of an independent dispute settlement mechanism is something that the industry sought. That the Finance Minister has announced an industry-specific safe-harbour provision will be notified, will help in resolving assessment issues relating to transfer pricing.