Nasscom, the apex body representing the Indian Information Technology (IT) industry, today proposed that it would like to work closely with the government “to drive an inclusive (which benefits all sections of society) economic growth agenda”.
In its interaction with Finance Minister Pranab Mukherjee today, the IT-BPO industry — represented by Nasscom — stressed that the industry and government would have to join hands to accelerate IT adoption in the government sector. “We received a positive response from the government,” said Nasscom President Som Mittal.
“The IT-BPO industry has the potential to transform the country and play a major role in the development of India’s key sectors, including education, healthcare, infrastructure, citizen services and financial inclusion, thereby creating significant employment opportunities across India, with a consequential impact on economic growth. Nasscom and the industry look forward to working closely with the government on this key agenda,” added Nasscom Chairman Pramod Bhasin.
The software body has also urged the government to extend availability of benefits under Sections 10A/10B for units in the Software Technology Parks of India (STPI) and Export Oriented Units (EOU) to mitigate the impact of the recession and protectionist measures being adopted globally.
“While large IT players can move their business into special economic zones (SEZs), it is the SMEs who will be hurt the most. To facilitate their continued growth, the government should extend the STPI Act benefits which will end in 2010,” said Mittal.
The IT industry, said Mittal, also sought amendments in Section 10 AA of the Income Tax Act, which mandate that SEZ export profits be computed with reference to the total turnover of the assessee, thus creating a discriminatory structure. The earlier finance minister (P Chidambaram) had stated in the interim budget that the anomaly in Section 10AA will be corrected through necessary changes in the Act.
Another area of concern for the IT companies is the duplicity of indirect taxes for packaged software and policies for service tax refunds. Nasscom has requested the government to develop a uniform approach on transfer pricing and amend fringe benefit tax (FBT) on employee stock options or ESOPs.
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The software body alerted the government that “direct and indirect protectionist measures by major countries are threatening to impede the industry’s business models. Competitive pressures from other countries like China, the Philippines, Vietnam, Brazil and Egypt — which offer substantial incentives (taxation, training subsidy, rent-free accommodation, etc) to attract global businesses — will continue to increase pressures,” cautioned Mittal.
On the e-governance front, Mittal said, “The government should initiate time-bound and outcome-based implementation of the already-approved e-governance programmes and evolve appropriate new programmes and implement the announced unique identity card for each citizen.”