Wednesday, June 03, 2009

Inclusive Development - Nasscom for extension of STPI scheme for SMEs

It is an excellent thought that Nasscom is looking forward to an inclusive growth and is looking forward to development of SME sector in the country. Even though it is felt by various people (including myself) that the extension of STPI scheme further will jeoardize the various other development schemes like IT SEZs, ITIR (IT Investment Regions) etc.

But Government should also be empathetic towards the concerns of the SMEs. Therefore in view of concerns of President Nasscom , the Government must give extension to the STPI scheme but with the rider:

1. 100% tax exemption to companies which fall into definition of Small enterprises in the IT Sector.
2. 50% tax exemption to companies which fall into definition of Medium enterprises in the IT sector
3. NO tax exemption to Large companies which fall into definition of Large scale enterprises in the IT sector.

The parameters to look like Number of Employees and turnover figures for the companies (already available with STPIs ) may decide if a company falls under the definition of Small or medium enterprise. However a blanket extension of the STPI scheme will have no takers for IT sezs or ITIR. The non equitable treatment to exports in other sector and preference to only IT industry does not also reflect that the Government is truly inclusive. The Finance Ministry must identify such export units operating as SMEs (and not from SEZs) wherein the Government may want to extend such tax reliefs beyond the IT sector.

Looking at Government and NASSCOM's commitments for inclusiveness for SMEs, it will be a great idea if Department of Information Technology may set up a separate division for promoting SMEs in the IT Sector with a view to support them to get IT projects from abroad and so on.

regards,

Sameer Sachdeva



Nasscom wants to partner govt for 'inclusive' growth
http://www.business-standard.com/india/news/nasscom-wants-to-partner-govt-for-%5Cinclusive%5C-growth/359969/

BS Reporter / New Delhi June 3, 2009, 1:14 IST

Nasscom, the apex body representing the Indian Information Technology (IT) industry, today proposed that it would like to work closely with the government “to drive an inclusive (which benefits all sections of society) economic growth agenda”...................


“While large IT players can move their business into special economic zones (SEZs), it is the SMEs who will be hurt the most. To facilitate their continued growth, the government should extend the STPI Act benefits which will end in 2010,” said Mittal.