Govt Unveils Package For Infotech

The government yesterday announced a fresh package to boost the information technology and software industry under which there will be new methodology to assess working capital, allowing acquisition of overseas firms and permitting banks to invest in venture capital funds.

Apart from this, the government has also allowed the use of international credit cards for the import of software. Under this, authorised dealers in foreign exhange have been permitted reimbursement upto $15,000 against international credit cards used by software developers/exporters for making advance payment of cost of software via the internet.

According to an official release, working capital requirment of software borrowers will be assessed on the basis of 20 per cent of the projected turnover for companies with capital limit upto Rs 2 crore. For other borrowes it will decided on the basis of deficit shown in annual cash budget system, an official release said.

 

The government has also directed banks to create an information technology financing cell in identifies branches at centres where the IT software and service units are larger in number.

Overseas software companies would be given blanket approval for investments upto 50 per cent of their cumulative export or foreign exchange earnings in three preceding years subject to a maximum $25 million under the fast track route of the Reserve Bank of india (RBI).

Equity investments in dedicated venture captial funds for Information Technology are made eligible for inclusion within the five per cent limit presently prescribed for equity shares including psus shares, convertible debuntres and mutual funds.

Software companies have been permitted to offer Amedican Depository Receipts (ADRs) and Global Depository Receipts (GDR) linked stock option schemes to their Indian or NRI employees.