US business body hails extension of tax holiday for STP

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Washington, May 3 (UNI) The US-India Business Alliance (USIBA) and the information technology industry have welcomed Finance Minister P Chidambaram's decision to extend income tax exemption for export-oriented Software Technology Parks of India (STPI) by one year till March 31, 2010.

''The move will primarily give some welcome respite to Indian Small and medium enterprises (SMEs) who would have found it hard to move into SEZs," said President, USIBA, Sanjay Puri .

For this reason, we look forward to a more permanent approach to the issue of continued incentivisation of this very important segment of the Indian IT industry, he added.

Established in 1991 as a government agency under the Ministry of Communications and Information Technology, STPI has been critical in paving the way for India becoming an IT powerhouse.

The Software Technology Park scheme is an export-oriented scheme for the development and export of computer software.

The scheme provides physical infrastructure, including dedicated high-speed connectivity, freedom for 100 percent foreign equity investment, and tax incentives.

More than 6,000 businesses are registered under the STPI umbrella, with 36 per cent growth by value in 2005-06 exports over the previous year.

The state with the largest export contribution was Karnataka.

STPI has a presence in many of the major cities of India including the cities of Chennai, Hyderabad, Noida, Lucknow, Kanpur, Allahabad, Patna, Gandhinagar, and Mumbai.

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