The IT sector too appears to have been somewhat let down by the budget. NASSCOM president, Kiran Karnik said he hoped for a pro-active role from the government especially in the domestic sector.

"We are happy with the long term objectives of the government. It has so far played a supportive and non-interfering role and it now must give some more boost," said Karnik.

Enhancing IT role in tax collection, education and other sectors could be one step in this direction.

The sector is witnessing wage hike pressures, which is likely to impact margins from going forward.

While margins have Margins stabilised for IT companies, the dollar has appreciated 4.6 per cent in April-June'04 quarter.