Nothing major for IT sector in India budget

Our Analysts have worked really hard to Digest the outcome of Budget and we are summarizing in a series of posts. To begin with, no major developments for the Indian IT sector out of the proposed India budget. Specifically, the most material element that had been debated was the possibility of an extension on the Software Technology Park (STP) tax holiday, which is set to expire in fiscal 2010. From a longer-tem perspective, we view the increased allocations on education spending and proposed college campus build-outs as a positive for the industry as it helps support the continued growth of India’s labor capacity.

With India’s fiscal 2009 budget behind us, we do not expect much in the way of near-term catalysts. At this point we are left exposed to broader macro trends and sentiment, and await the FY2009 guidance period in April from all the Major IT companies.