Since the budget 2009-10 was announced, i was looking for what impact would it have on the local IT industry. Even though not all that much has been written on the topic by journalists, which was kind of disheartening, I did find somethings online. As with everything, there’s both good news and bad news here.
The good news is, there is word on Phase II of PSEB’s certification scheme coming along, with a whopping fifty (50) companies for CMMI level 2, thirty (30) companies CMMI level 3 and fifteen (15) companies CMMI level 5. Also, this time PSEB will fund twenty (20) for ISO27001 Information Security Management System and twenty (20) for ISO20000 IT Service Management System certifications for member companies across the country. These come at a hefty Rs. 460 million price tag to the national exchequer, but will definitely help put a lot more Pakistani companies on the world map.
For the uninitiated, PSEB’s past certification schemes (since 2002) have so far led to 120 companies being ISO9001 Certified, and 21 companies assessed at various maturity levels of CMMI, with 4 currently undergoing assessment. PSEB subsidizes the consultancy fee and the audit/assessment fee for selected organizations at different rates. Uptil now, it’s been either 80-20, 75-25 or 70-30 subsidies where PSEB bears the larger amount and the company bears the smaller. E.g. for 80-20, 80% cost will be borne by PSEB and 20% by the selected organization. This reduces the certification costs drastically, and allows the selected company to compete head to head with bigger business in the international market.
Also, we have word on new IT parks being setup at Karachi & Lahore Airports at a cost of Rs. 50 million, which should help in subsidizing start up costs for various companies.Why choose airports for IT parks you ask? I have no idea either.
Overall, the government has earmarked Rs. 2.3 billion for IT in this years’ Public Sector Development Plan (or 0.42%) through 65 projects.
As for the bad news, since we (the IT industry as a whole) come under the Services category, there’s the question of imposition of 16% GST. Quite plainly, it means that whatever we earn (locally and internationally), gets taxed. This will come as a devastating blow to all of us, simply because it means that our prices (or margins) for the next year will expand (or shrink) dramatically. So far, i’ve only seen Netsol’s Salim Ghauri’s views on the subject. Why is PASHA quiet here, i’d like to know!
So there you have it. Comments and questions are welcome!
Update: So i hear that PASHA is not quiet at all, just not publicizing their stance much. I’ve been informed that they’ve sent a letter of recommendations for the revival of the IT industry, which does contain some very good points mind you, and are very pushing hard for it.
Image Credit: Dailytimes.com.pk