Nasscom urges govt to extend STPI scheme

New Delhi, Aug 20: IT industry body Nasscom today urged the government to extend the STPI scheme beyond 2009 to partially offset the rupee appreciation impact.

STPI (Software Technology Parks of India) scheme offers tax incentives to IT/ITeS companies till 2009.

"We have already written to the government. One of the points was related to ECB(External Commercial Board), which has already been taken care of by the government. But the extension of STPI scheme is really important for the industry to counter the impact of rupee appreciation," Nasscom President Kiran Karnik told reporters on the sidelines of an Oracle event.

He also said that rupee value is determined by the market forces but the government can still play an active role by providing other measures including extension of an STPI scheme.

Finance Ministry had recently announced "henceforth, ECB (of) more than $20 million per borrowing company would be permitted only for foreign currency expenditure for permissible end-uses of ECB." The move aimed at reducing the flow of dollars into the country.

Rupee has appreciated against the dollar around 10 per cent so far this year. The industry has been concerned about this trend and its strong impact on the profitability and competitiveness, Nasscom said.

As a result of the sharp rupee appreciation, the top three IT companies - Infosys Technologies, Wipro, Satyam had registered lower profits in the first quarter of this fiscal.

Nasscom President was speaking on the sidelines of the Oracle Education Foundation program, where Oracle announced the availability of its online learning portal Think.com in Hindi language.

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