 "GTech urges policy for IT growth in small towns")
Over 90 per cent of the IT exports of $86 billion for the year 2013-14 came from companies located in seven Indian cities. As a result, the 50 plus tier III & III cities are not enjoying the full benefits provided by the IT industry in terms of employment, living standards and all round development. It is estimated that every direct employment in the IT industry generates four indirect job opportunities to the local population.
VK Mathews, chairman of GTech said the growth of the IT industry in smaller cities and towns was essential to decongest the big cities, provide rural employment and promote an inclusive growth.
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"One policy change that can effectively be a game changer in this regard is the restoration of export benefits through the Software Technology Parks of India (STPI) scheme, at least for those companies in the Tier-II and III cities. Thousands of small IT units, especially those in the MSME sector will have funds to reinvest and grow, thereby creating additional employment. Also, large companies would be motivated to develop their base in smaller cities. We will bring this to the notice of the central government very shortly," he said.
The export benefit schemes for the IT industry were discontinued by the Centre in March 2011. It is widely felt that while large companies have outgrown the need to be supported through tax benefits, there are thousands of small IT companies which need funds for re-investment and increasing head count. It is also pointed out that by restoring export benefits for companies in smaller cities and towns, revenue loss to the government is minimal, since 90 per cent of the taxable income today is generated in the big cities.
"We are extremely happy to see the thrust on entrepreneurship by the current government. It is also the responsibility of the industry to create and nurture entrepreneurs who would sustain in the longer term, standing the test of enterprise and time," Anoop P Ambika, Secretary, GTech.