Bangalore: Sanguine about India's ability to build world-class software products after its emergence as a global player in the booming software services sector, Infosys chairman N R Naryana Murthy has said he sees "exciting times" ahead for the country in the "product landscape".

"Given India's global acceptance in software services, it is only natural that the next step would be for innovative, high-end software products," Murthy, who is the chief mentor of Bangalore headquartered Infosys told.

"I see exciting times ahead in the product landscape," Murthy said on the prospects that holds for India in the product market in which Indian companies were late entrants. Noting that Indian companies were making their mark, he said the core banking solution of i-Flex "Flexcube" and Infosys's "Finacle," were consistently in the top 10 software products in the global banking market.

"A local accounting product, Tally, has nearly 100 installations and is used in 88 countries around the world. Companies like Ramco have been pursuing a product route in global enterprises for many years now," he said.

Further, Murthy said, Indian companies were now stepping up initiatives to tap the embedded software market and already provide embedded solutions to over 60 per cent of global independent Software Vendors.

Answering a query on what India should do to catch up with China and South-East Asian countries in the hardware sector, he said efficiency in the supply chain had to be improved which meant better efficiency in Government in ports, banks, customs and excise.

Murthy said there would also have to be a policy that provides for a "nationalised" duty structure "so that we do not pay more duty for components than the finished products like it is today. We have to create good infrastructure -- airports, power, roads, ports... etc."

Asked what the IT industry should do to face taxation after the current taxation period comes to an end in 2010 or should it continue beyond that period also, he said, "I have held the view that every industry should pay its share of tax and any concession should be for a particular purpose to gain size and stability only."

Murthy also slammed the Karnataka Government's recent decision to increase its sales tax on IT products (software and hardware) to 12 per cent from four, terming it a "retrograde step."

The tax on software would hurt the educational sector the most, he said. "Today, a computer and software is like a book and there is no sales tax on books," he said, emphasising that the need of the hour was for children and students in rural areas to learn on computers and to access knowledge through the web or on multi-media.

"By increasing the cost for them, we are reducing the opportunity to them and discriminating against them. It will hurt the rural sector, as their buying power is limited.

"I would propose to reduce the tax to zero for the next 10 years because we want to increase literacy, increase the reach of governance and bring in e-governance."

Observing that IT was a powerful tool to empower the poor and the dispossessed, he said it could deliver Government services and information at a fast pace all over the State and empower the poor.