Restore STPI scheme: CM to Manmohan

Published: 25th July 2013 11:47 AM  |   Last Updated: 25th July 2013 11:47 AM   |  A+A-

Chief Minister Oommen Chandy has proposed Prime Minister Manmohan Singh to restore the Software Technology Parks of India (STPI) scheme for the revival of the IT industry in the country.

In a letter addressed to the Prime Minister, Chandy said that the Centre should consider the revival of the scheme for five years, effective from the current financial year, at least to those units in tier 2 and tier 3 cities to help the companies tide over 'the immediate crisis'. The representation follows the members of Group of Technology Companies' (GTECH) meeting with the Chief Minister last week.

GTECH, the industry body representing the IT industry in the state, had told the CM that discontinuance of the scheme was the single biggest setback faced by the small and medium companies.

"In one stroke, by restoring the STPI scheme, the government can rejuvenate the sagging fortunes of Indian IT units in the SME sector. IT industry is the largest employer in the private sector with over 30 lakh people employed directly and another 95 lakh gaining indirect employment. Not only will this game changing initiative ensure the creation of more jobs but it would also see IT companies flock to smaller towns and cities thereby decongesting the metros," V K Mathews, chairman, GTECH, said.

According to GTECH, over 60 per cent of the entire spending of the software companies relate to employee salaries which are taxed and hence the contribution to the exchequer remains significant. The industry body reasons that additional levy in the form of corporate tax leaves very little for the IT units in the SME sector to re-invest, increase headcount and grow.

"The STPI scheme was a key contributor in the success of the Indian IT industry in its infancy. While some companies had outgrown the need for this scheme, there remain a large number of IT units for which the discontinuation of the scheme in 2011 was a heavy blow," Anoop P Ambika, secretary, GTECH, said.

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