Indian economy is under constant pressure to fight back inflation and other economical crises though it is hit hard by all kinds of catastrophes. The most sought after and the powerful domain is the STPI or the IT which drastically grew in the past few years. This was predominantly because there were tax incentives declared by the Indian government. China duplicated this idea and now has become one of the strongest nations that successfully manage trade.
China’s motives were basically to introduce tax concessions and to develop its technological and industrial growth. It went a step further and introduced zero tax payments for manufacturing sectors and a 12.5% tax concession after two years of zero taxation. For now china has a lot more than what India has as its fund reserve. It is approximately figured to $3 trillion which is an absolutely unbelievable improvement as to what it was in its mid 70’s. China wasn’t having enough foreign currency to do a simple trade wherein it has now become one of the most trustworthy nations for business and investments.
Chinese products are traded all over India with its conventional tag and this shows how effectively Chinese economy has grown. Chinese makes are costlier yet aren’t badly affected on grounds of sales. China made smart use of the resources and funds it drew from the other countries now standing as one of the toppers in selling industrial goods. Within a few years china will have become the master of all trades and we would probably depend on china for typical products that we need.
India, in future is predictably a loser. Making illegal use of what shouldn’t be is just happening all over India. India was funded by the UK for foreign currency and showed equivalent growth to china in the first few years. India now houses more than just a 5000 IT companies that successfully head through the market shares. The STPI or the Software Technology parks of India created the SME or the Small and Medium Enterprises that helps lot of smaller yet dynamic IT firms. With this India trades shares no lesser than 50 %. Budget 2011 announced norms to close down the STPI which very hardly hit the SMEs. This isn’t really a healthier move.
There are primarily some reasons that lead to the termination of the STPI.
Real estate plays a main role in freezing out the STPI mode and major IT parks are becoming more popular in selling land instead of what they are supposed to do. The SME or the small and medium enterprises are the worst hits in this change as the plan aims at constructing industrial towns with liberalization in taxation for a few years of growth. Smaller IT firms fall under this category as their developmental aspects are completely washed out. CEOs also let a sentence out that IT industries must exercise proper yet reasonable taxation eventually closing down the STPI design. SEZ or the special economic zones have been constructed all over the country that very greatly downgrades the growth of smaller industries.
India might be quite progressive over the next few years but that doesn’t mean it is doing well in the grounds of Information Technology. China has increased its market shares by 40 % and Philippines has surpassed India in terms of market shares and trading. This is really a perfect instance for an emerging economy...
So where is India??? With all bad terms together India is out of the game now... IT was India’s trump card but the budget totally exploited the way smarter chance of India getting developed...
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