IT players concerned over extension of STPI Act

The IT players located in and around Chandigarh are worried over the uncertainity over the extension of the STPI (Software Technology Parks of India) Act that comes to an end in March 2011.

A senior official at the STPI Mohali apprised that they were in the process of taking feedback from the units registered with them about the restructuring of STPI. The STPI Mohali caters to the units located in Punjab, Chandigarh and parts of Haryana. The draft prepared would be forwarded to ministry of information technology and it would put it across the ministry of commerce.

Except for a few big players (Infosys, Dell, Tech Mahindra) all are small and medium entreprises registered with STPI Mohali.

The region registered an export of over Rs 1,100 crore of software out of which over Rs 800 crore was contributed by the small and medium firms.

According to Puneet Vatsyayan, director of Mobera Systems (a company that has a substantial exposure to the US and European markets) the STPI Act enables SMEs to work from anywhere wihout any geographical restrictions. If the STPI Act is merged in the SEZ Act this would facilitate only large player and developers and the small players would be marginalised. "The BPO services providers who are running in small rented premises may not find it viable to be relocated in SEZs as that would incur a higher cost on them".

Pratap Aggarwal, managing director of IDS Infotech maintains that the tricity engages over 12,000 of skilled persons in IT sector, the relocation of units in the wake of merger of STPI Act into SEZ Act would create a hassle for the IT players to trasport the staff to the new destination and add a cost".

He explained that some of the units located in tricity recently acquired outfits in the overseas markets. Their turnover is not reflected in the STPI document here but the operations are done here this would also be effected.

STPI official added the ministry of science and technology has already recommended a 5 year extension of STPI Act, which comes to an end on March 31, 2011 and suggested that this Act should be at par with SEZ Act.