'IT cos hesitant to set up base in NE'

R Jai Krishna

NEW DELHI: Information Technology (IT) companies are hesitating to establish base in the North-Eastern region, due to the lack of infrastructure and insurgency prevailing there.

Talking to CyberMedia News here, on the sidelines of announcing the third North East Business Summit, minister for Development of North East Region, Mani Shankar Aiyar said: “There is a huge human resource there and the IT companies are hesitant to establish a base due to the lack of infrastructure, connectivity as well as the insurgency prevailing there.”

Aiyar pointed out the need to for heightened awareness creation among investors and the business community. “The government has announced a series of sops for companies interested in establishing a base in the North Eastern Region,” he said.

Aiyar is set to formally announce the incentives at the Third North East Business Summit to be held in New Delhi.

The new policy - ‘North East Industrial and Investment Promotion policy (NEIIP), 2007’ - is a package of fiscal incentives and other concessions for the North East Region. Already approved by the government, the policy has been notified with effect from April 1, 2007.

The NEIIP 2007 covers all the north eastern states: Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. The incentives will be applicable for all new units as well as existing ones which go in for substantial expansion unless otherwise specified and which commence commercial operations within the 10-year period.

As per the policy the government has decided to offer the incentives irrespective of the location, except that it should be within the North-Eastern region. The policy will offer 100 per cent Income Tax and Excise Duty exemption, apart from Capital Investment Subsidy, which is subject to approval on a case-to-case basis.

The policy has been designed to make applicable existing tax concessions under provisions of Section 10A and 10AA of the Income Tax Act.

With non-availability of human resources as one of the impediments to the development of Software Technology Parks or IT-related SEZs in the region, the government has decided to extend tax benefits under Section 80IC of the Income Tax act to IT-related training centers and IT hardware units.

The North-East Industrial development Finance Corporation (NEDFi) will continue as a nodal agency for disbursal of subsidies under the NEIIP 2007.

However DS Poonia, joint secretary, for the Ministry of DoNER said that IT companies have seen a huge potential in terms of talent for the BPO industry. “Though the BPO companies are recruiting from the North-East region, due to the high literacy and English-fluent talent available, they are still hesitant to establish a base there for various reasons, and insurgency being one,” he said.

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