STPI likely to get 3-year extention

[arunkathir]

Seems the IT industry's longtime demand for Software Technology Park of India (STPI) scheme extension is finally being met.


During a CII event today, Union Minister of Communications and Information Technology, Government of India, said "The Union Ministry for Communications & Information Technology is for extending the tax benefits enjoyed by the STPI registered ICT units by three more years from 2011. The proposal is, however, pending for the Cabinet approval."

Since long, IT industry has been asking the government to extend the STPI scheme, which promises tax holidays to IT and ITeS firms, up to 2012.

Under STPI scheme, tax exemption is offered to export-oriented IT companies which are outside the special economic zones (SEZs). Presently, the scheme is scheduled to end in March 2010.

Delivering the Inaugural Address at Connect 2009, India's premier ICT event, being organised with the theme of "Resurgence of the Indian ICT Sector" by the Confederation of Indian Industry (CII), in association with Government of Tamil Nadu, here today, Raja said that the State Governments should be given equal responsibility and opportunity in bringing in proactive policies and regulations related to foreign investment in the ICT sector.

The Union Minister said that 2008-09 proved to be the year of transformation for the Indian ICT industry. The industry witnessed a process of reengineering in response to the changing macro economic environment. However, despite the global economic meltdown, the Indian IT and BPO sector grew by 12% in the financial year 2009 to earn aggregate revenue of $71.7 billion. The export of IT-BPO grew by 16% to reach $47.3 billion during 2008-09.

The growth proves that the basic business model of the Indian ICT sector is efficient. Raja said that the Central Government is focusing on developing semiconductor fabric hubs across India in a big way. So far the Central Government has approved 7 to 8 projects with Rs 70,000 crore worth of investment. In order to incentivize the semiconductor sector, the Central Government has decided to invest 20% of the total cost of each of these projects.