Hyderabad, May 22 The Hyderabad Software Exporters’ Association (HYSEA) has asked the new Government at the Centre to treat all domestic IT work as ‘deemed exports’ and extend the benefits of STPI scheme further in order to help the industry cope with the slowdown.
“In the current global economic environment, one source of growth for the IT industry could be the domestic markets. Also, we should ensure that all sections of society benefit from IT. This can be achieved by giving incentives to IT jobs in the domestic markets,” Mr M. Narasimha Rao, President of HYSEA, told Business Line.
Pointing out that the STPI scheme helped the industry in the last 10 years, he said the extension would send a positive signal and help attracts large investments into the industry.
Strengthen SMEs
If the Government was not in a position to extend the scheme to whole of the industry, it should at least consider providing this exemption to smaller companies (SMEs with less than a turnover of Rs 100 crore).
Besides, he asked the Government to allow shifting of their business to SEZs to reduce costs. “The larger companies leverage SEZs to reduce their tax liability. But SMEs cannot do this easily. As per SEZ policy existing businesses cannot be moved to SEZs,” he pointed out.
The HYSEA also felt that the Government should mandate all the bigger system integrators doing government works to subcontract at least 10-20 per cent work to SMEs.
Cross-functional team
The association wanted the newly-elected Government in Andhra Pradesh to set up a cross-functional team to identify steps needed to take from time to time and ensure unhindered growth.
If the STPI scheme was not to be extended nationally, the State should consider refund of all tax paid by the SMEs. It should also consider setting up of multiple incubation centres through public-private partnership to help out new entrepreneurs.
Source : Business Line