Orissa small IT firms seek sops

Small and medium information technology enterprises in Orissa have sought a host of enabling measures from the newly elected government in the state to remain competitive during the ongoing recession.

These measures include complete exemption from VAT (value added tax) on hardware procurement by the units, investment subsidy and employment subsidy as well as ‘plug and pay’ office space for upcoming units.

“IT SMEs in the state have been hit hard by the economic meltdown and are finding it increasingly difficult to bag new orders. In such a scenario, these units should enjoy a complete waiver of VAT on hardware procurement and also be given other facilities like investment and employment subsidies which are provided by other IT-friendly states in the country,” a senior official of the Confederation of Information Technology Enterprises (CITE), Orissa, told Business Standard.

VAT on IT hardware currently ranges from 4 per cent to 12.5 per cent.

The official said the state government needs to introduce a focussed ICT (information and communication technology) policy which provides an investment subsidy of 15-20 per cent on a capital cost of up to Rs 20 lakh for upcoming IT units.

This apart, IT SMEs have called for other facilities like provisions for cheap land, uninterrupted supply of power and the setting up of more Software Technology Parks of India (STPI) centres in the state.