Incentive package for high-tech sector gets nod

Nasscom 2007

The government has given an 'in-principle' approval to the special incentive package prepared by the department of information technology for semiconductor manufacturing and other high-tech industries.

Announcing this at the Nasscom India Leadership Forum here today, Union Minister for Communications and Information Technology Dayanidhi Maran, said, "I have always been a supporter of extending sops for Software Technology Parks of India (STPI) beyond 2009. But the industry is divided over the issue. Let's try to get the extensions together (looking at Nasscom President Kiran Karnik)."

He was responding to the inaugural comments of Nasscom Chairman Ramalinga Raju. Earlier, Raju had said, "We hope the sunset clause of 2009 for the STPIs is extended for another 10 years." Karnik assured Maran that he had the "full support" of the industry.

Realising the infrastructure problem the Indian IT/ITeS segment is facing, Maran said, "A note of recommendations from the PMO suggests that integrated modern townships for sunrise industries such as the IT-BPO sector are imperative."

It will ease the existing pressure on metros and create growth in tier II and III cities. The details of the township are to be worked with the Nasscom and other industry participants.

"Infrastructure, in terms of better and more airports, particularly in tier II and III cities and special modern greenfield integrated townships, need to become a part of our future roadmap. Already, such hubs are being envisioned by the country's policy makers," Maran explained.

Karnik, in his address, said, "We have three primary focus areas "" one is to ensure data security and all other initiatives related to the delivery model; second would be workforce development; and the last promoting innovation around processes, products and service models."

The Indian IT industry, including hardware, has grown 10-fold over the past decade "" from $4.8 billion in 1997-98 to $47.8 billion in 2006-07 "" and its contribution to India's gross domestic product (GDP) is estimated to have risen from 1.2 per cent to 5.4 per cent.

According to the findings of the Nasscom's Strategic Report 2007, Indian service providers have grown their share of contracts exceeding $50 million from 1 per cent in 2002 to 7 per cent in 2006, while over $10 billion will be invested by the MNCs over the next few years.