STPI scheme may get extension beyond '09

MUMBAI, INDIA: The union government is likely to extend the Software Technology Parks of India (STPI) scheme beyond 2009.

The government would also amend the existing Cyber Security Act to improve India's image as a safe outsourcing destination, according to A Raja, minister of Communications and IT.

Delivering the keynote address at the Nasscom India Leadership Forum 2008 here today, Raja said that the IT ministry is in complete sync with the demands of the STPI, Special Economic Zone schemes for the industry and is pushing the case for the same.

"The STPI scheme initially thought out to develop IT industry in the country will be extended so that IT industry continues to achieve its stupendous growth," Raja said.

The STPI scheme, which is set to expire in 2009, provides a 10-year income tax exemption for units situated in software technology parks.

Nasscom had on Monday sought the extension of the STPI scheme.

"We have asked for a blanket continuation largely for the benefit of the small and mid-sized companies," Som Mittal, president of Nasscom had said earlier.

While large companies could move over to SEZs, small and mid-sized companies were finding it difficult to follow suit owing to cost barriers. SEZs are mostly located in and around large cities.

Raja said his ministry is trying to extend the concessions currently available to SEZs.

He lauded the IT industry for achieving its targeted growth despite global recession and a strong rupee. "I am deeply impressed that the IT industry is on par to reach $40 billion in revenues by 2008 and provide employment to two million people, an increase of 3, 70,000 over the previous year."

On the amendment to the Cyber Security Act, Raja said the amendments will "add muscle to the current Act and help safeguard the IPR in the country."

He added that the IT ministry is taking inputs from the industry and will be tabling the amended report at the next Parliament session.

Raja called upon the IT industry to come out with innovative products and services to help reach the rural India. "Eighty per cent of the population is bereft of Internet connectivity and the IT Industry should come with affordable products and services so that the fruits of IT revolution will reach the masses"

Raja also said that the IT Ministry is planning to develop Tier 1 and Tier 2 cities into major IT hubs.