Extend STPI benefits to IT/ITeS till 2012: Assocham

NEW DELHI: Industry body Assocham has asked the government to extend the Software Technology Park of India (STPI) scheme, which promises tax holidays to IT and ITeS firms, up to 2012.

"The STPI benefits should be extended up to 2012," the association said, adding that the ITeS and BPO sector, reeling under the slowdown in major world markets, would be able to come out of its current plight in the next three years.

IT industry needs to be given further tax incentives under STPI scheme as the sector is reeling under severe pressure of meltdown, it said, adding that the units in the SME sector employs about 65 per cent of the country's IT workforce.

"The withdrawal of tax incentives would de-stabilise and throw out of gear the fragile SME sector," it said.

The chamber also asked the government to set up a Rs 100 crore venture capital fund besides special financing arrangement for the industry.

Under STPI scheme, tax exemption are offered to export oriented IT companies which are outside the special economic zones. The scheme would end in March 2010.