Nasscom welcomes research funding body

The National Association of Software Services and Companies (Nasscom), which represents the Indian IT industry, Monday welcomed the interim budget proposal to set up a research funding organisation to fund projects, with tax benefit to its contributors.

"Funding is always difficult for engineering and R&D (research & development) sectors, as technology is yet to be recognised as collateral to offset risks. We will work the government on the research areas for funding," Nasscom said in a statement.

Presenting the interim budget for 2014-15, Union Finance Minister P.Chidamabaram announced that the research projects would be selected through a competitive process and contributions to the research organisation would be eligible for tax benefit.

Though the interim budget had no policy announcements for the IT industry, Nasscom hailed the government support to the National Skill Development Corporation and other skill building initiatives and measures to ensure the micro, small and medium enterprises (MSME) participate in public procurement.

"The interim budget's focus on fiscal consolidation, tax reforms, inclusive growth and thrust on skill development augurs well for the country's economy," Nasscom president R.Chandrashekar said in the statement.

Appreciating the government's efforts to revive the manufacturing sector, the industry body said the services sector had to be equally promoted in view of its potential to attract domestic and overseas investments and generate direct and indirect jobs.

"We hope a full-fledged finance bill will encourage setting up of start-ups and promote entrepreneurship by simplifying procedures, while we continue to engage with the concerned departments on issues related to implementing service tax refunds, transfer pricing assessments and TDS refunds," Chandrashekar added.