STPI benefits will end this month. Som Mittal, President of Nasscom said the incentives are necessary for the industry to keep its momentum.
Mittal added, the topic will be raised in the parliament during discussion. “With the end of the STPI benefit from March, we expect the government to offer tax exemptions to support small and medium enterprises (SMEs) because they are the ones who are driving innovation in the industry." Mittal said.
Mittal stated that the interim offer of investment-based incentives will not be useful to the IT industry as this industry works on human capital. Hence, all incentives should ensure that it provides relief for human resources.
Further more, Nasscom has also made a request to reconsider the imposition of Minimum Alternate Tax (MAT) on companies operating in the special economic zone.
In the latest budget 2011-12 finance minister had announced that SEZs will come under MAT.
Mittal pointed out that the country had negative trade balance and IT industry can help improve the situation, “India needs to focus on IT exports to offset trade balance and technology offers high value-added exports.""
The IT and BPO industry which is pegged to be $76-billion was disappointed over the government"s decision to stop the STPI scheme. Nasscom is expecting the industry to register growth of 16-18 per cent for the year 2011-12 and add 2.4 lakh jobs. It also expects the average salary hike in the range of 10-12 per cent this year.
"The IT and ITES export revenues would touch $60 billion this year and domestic business would touch $15 billion," said Mittal.