Nasscom digs at non-inclusion of STPI in budget

NEW DELHI, INDIA: Nasscom (National Association of Software and Services Companies) has appreciated the fact that the Union Budget is inclusive and has a strong focus on the social sector.

A release by Nasscom said that it is, however, disappointed with the absence of any discussion on the extension of the STPI scheme.

It said that STPI is extremely critical for small enterprises and the BPO industry, as well as for expansion in tier 2 and tier 3 cities as they are unable to avail the benefits of the SEZ scheme.

The STPI benefits are available till March 31 2009. “Through continued dialogue we will be able to convince the government to consider our proposal and help India garner the large opportunity in this sector,” said the association.

The imposition of service tax of 12 per cent on customized software and higher excise duty on packaged software could lead to increased cost of IT and could slow down the IT usage in the domestic sector.

This impacts in particular, small and medium enterprises that have just started deploying IT.

The IT-BPO industry is talent and skill intensive and in this light, the association welcomed the thrust on primary and higher education and skill building initiatives.

The Sarva Shiksha Abhiyan, increased allocations for higher education and the creation of the Skill Development Mission with the announcement of Rs 1,000 crore as government's equity in this proposed non-profit corporation will ensure constant supply of employable workforce to this sector.

Interconnecting the knowledge institutions through broadband would also establish synergies across educational institutions.

Nasscom also welcomed the new initiatives on setting up rural service centres and state data centres as they would help take the benefit of IT to the masses.

The association said that it will continue its dialogue with the government on matters like units in SEZ, advance pricing agreements, etc.