Software Export Revenue Tops Rs 3,900cr

Software export revenue exceeded Rs 3,900 crore in 1996-97, according to the preliminary estimates of the National Association of Software and Service Companies (Nasscom).

Revenues from the domestic market exceeded Rs 2,500 crore, Nasscom executive director Dewang Mehta said here yesterday. The final results will be announced in the first half of June, he said.

Despite non-tariff barriers faced by the software industry in the US in the form of visa restrictions and wage parity rules, software exports recorded a growth of 54.7 per cent. This was due to increased penetration in the European, Japanese, Australian and South African markets, Mehta said.

 

A part of this growth could be attributed to increase in the offshore services offered by Indian software companies, Mehta said.

He, however, said that the growth figures would have been more impressive in the absence of the minimum alternate tax (MAT), adding that software exports should be exempted from it. Date conversion projects for the year 2000 (Y2K) have added to the growth of software exports, the Nasscom chief said.

Nasscom estimates that in the next two years, the Indian software industry could corner a market of $2-5 billion in the Y2K date conversion projects given adequate fiscal and telecommunication support from the government.

The software companies association has thus demanded a special tax incentive (similar to that given to research and development units) of 133 per cent tax rebate on all expenses related to in-housing training of manpower for software projects. Given the Y2K manpower crunch, and the fact that there are less than 1,000 days left for the Y2K deadline (December 31, 1999), in-house training (with special tax incentives) is the best way to increase the number of Y2K experts, Mehta said.

Nasscom has also demanded a 30 per cent cut in tariff on national and international high speed datacom links (64 kb per second and above). The software companies association has urged the insurance companies in the country to carve out a market share in the $300 billion Y2K insurance and litigation opportunity.

Nasscom also announced the setting up of the Institute of Computer Software Professionals of India (ICSPI), to increase the number of software professionals in the country. The government has already allocated Rs 5 crore as seed money towards this institute, Mehta said, adding that the first batch of 2,000 students would ready for the industry in 1999 itself.

The institute would be an autonomous organisation run by industry experts with government representatives and academicians on it governing council, he said.

ICSPI, which is expected to provide over 10,000 professionals every year, will offer short-duration courses for working professionals and longer-duration courses for fresh graduates.

The software association also announced the setting up of Nasscoms chief financial officers forum which would prioritise the finance issues facing the industry.

The forum would work out solutions to facilitate availability of working capital, venture capital and finance for the software sector, Mehta said.

The forum will recommend steps to attract investments into the sector, besides suggesting possible changes in government policy to facilitate the growth of this industry, Mehta said.