Govt mulls incentive scheme for STPI units

After abolishing the extended tax holidays for the IT units registered with Software Technology Parks of India (STPI) last year, the Central government is considering a new alternative incentive scheme.

“The scheme will be based upon two main objectives- dispersal of IT (information technology) units from tier I cities to tier-II cities through a new incentive regime and contributing support to the MSME (micro small and medium scale enterprises) sector so that the entrepreneurship grows without any botheration,” said Omkar Rai, Director General, STPI.

He said, the new scheme will be ready by the end of this financial year.

Earlier, STPI offered tax exemption scheme which benefited export-oriented units under Section 10A and Section 10B of the Income Tax Act. The term of the scheme had ended in March last year. The industry has, since, been demanding an incentive package to replace the earlier scheme, especially for new organisations.

The exports of IT and IT enabled services from the country have grown from $59 billion in 2010-11 to $69 billion dollar in the last fiscal, an increase of 16.3 per cent. The contribution of IT and ITES to India's GDP has risen to 7.5 per cent in 2011-12 against 7.1 per cent in 2010-11.Similarly, the IT software and services employment has reached about 2.77 million in 2011-12 against 2.54 million in the previous fiscal.

Rai predicted that the software exports from the country are likely to grow by 14-15 per cent and from the state by 17 per cent in the current fiscal.

In Odisha, the software exports had jumped by 17 per cent in 2011-12 compared to 2010-11. Exports by IT units, registered with STPI and IT Special Economic Zone (SEZ) in the state, rose from Rs 1,376.88 crore to Rs 1,611.67 crore.

On the expansion of more STPI centres in the country, he said, opening of STPI centre in Balasore is under active consideration.