Telecom minister to meet FM for extension of STPI scheme
The IT ministry is also ready to take the matter for the Cabinet’s consideration and has asked the officials to prepare a Cabinet note in this regard.
By Niranjan Bharati, TNN |
NEW DELHI: Information & Technology Minister A Raja will meet Finance Minister P Chidambaram next week to press for extension of the software technology parks of India (STPI) scheme beyond 2009. Mr Raja has decided to meet Mr Chidambaram after the finance ministry didn’t respond to his proposal to extend the scheme. The scheme is expiring in 2009.
"I will meet the finance minister next week and then decide on the future course of action," Mr Raja told ET. Earlier, the IT minister, in a letter to the finance ministry, sought extension of the scheme for a period of another 10 years.
The IT ministry is also ready to take the matter for the Cabinet’s consideration and has asked the officials to prepare a Cabinet note in this regard. Official sources said the department of information technology is in the process of preparing the Cabinet note and it would be sent for the Cabinet’s consideration after a personal discussion between Mr
Raja and Mr Chidambaram in this regard.
The software industry is clamouring for the extension of the scheme, which is mainly for the benefit of the small players. "Big players may not need any sops and also they can establish their units in the special economic zones (SEZs) to get the incentives, while small players do not have such options as companies are not allowed to relocate their units from STPIs to SEZs," Electronics and Software Export Promotion Council executive director DK Sareen said.
There are instances where applications of smaller companies for setting up units in the SEZs have been rejected because of their insignificant size, Mr Sareen said. The industry has asked the government to continue with the incentives at least for such companies who have established the units at a later time, he added.
Under the scheme, exemption is provided to STPI units under Section 10A and 10B of the Income Tax Act. The government has initially started the scheme to encourage software exports, without putting any time limits. However, it inserted a clause that the provision would end after a period of 10 years through an amendment in 2002. Because of the exemption, all major IT companies like Infosys, TCS, Wipro and Satyam are affiliated to STPIs.
"I will meet the finance minister next week and then decide on the future course of action," Mr Raja told ET. Earlier, the IT minister, in a letter to the finance ministry, sought extension of the scheme for a period of another 10 years.
The IT ministry is also ready to take the matter for the Cabinet’s consideration and has asked the officials to prepare a Cabinet note in this regard. Official sources said the department of information technology is in the process of preparing the Cabinet note and it would be sent for the Cabinet’s consideration after a personal discussion between Mr
Raja and Mr Chidambaram in this regard.
The software industry is clamouring for the extension of the scheme, which is mainly for the benefit of the small players. "Big players may not need any sops and also they can establish their units in the special economic zones (SEZs) to get the incentives, while small players do not have such options as companies are not allowed to relocate their units from STPIs to SEZs," Electronics and Software Export Promotion Council executive director DK Sareen said.
There are instances where applications of smaller companies for setting up units in the SEZs have been rejected because of their insignificant size, Mr Sareen said. The industry has asked the government to continue with the incentives at least for such companies who have established the units at a later time, he added.
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"All players should be given equal opportunities. In such case, a company which has established its unit under the scheme in 2007 should be given the incentives for a period of up to 2017. Same should be applicable for the new parks established under the scheme," he said. Under the scheme, exemption is provided to STPI units under Section 10A and 10B of the Income Tax Act. The government has initially started the scheme to encourage software exports, without putting any time limits. However, it inserted a clause that the provision would end after a period of 10 years through an amendment in 2002. Because of the exemption, all major IT companies like Infosys, TCS, Wipro and Satyam are affiliated to STPIs.
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