The National Association of Software and Services Companies (NASSCOM) announced its recommendations for the upcoming Union Budget to be tabled by the newly appointed Government in the upcoming parliamentary session. NASSCOM has explored the industrial requirements and perspective of various stakeholders taking their immediate benefits into account to ensure they don't face any roadblocks in their growth trajectory. With the industry accounting for over 6.6% of the nation's GDP and employing over 4.1 million skilled individuals, it clear that it has a multiplier effect on India's economy and promoting it is crucial to achieve the USD 5 trillion GDP milestone by 2024.
India's strength in IT-BPM services must be consolidated, says the body. It is proposing the establishment of a tax friendly Special Economic Zone policy for the next 20 years would help retain existing tax benefits as well as continue to generate employment while increasing foreign exchange earnings. It is also proposing incentivizing R&D based investments. India's Engineering, R&D market has grown to USD 30 billion in the financial year 2019 and is estimated to touch USD 42 billion by 2022.
While there has been a continued focus on encouraging IT adoption and allocation of funds across sectors like an Innovation fund for secondary education, currently there are no specific incentives for R&D for IT companies. For this NASSCOM has said that measures to promote the creation of intellectual property in ER&D through incentivizing investments in centres of global MNCs in India and nurturing 1000 technology spin-offs from the ER&D centres in India by especially through 3D printing can help generate direct and in-direct employment for 350,000 people by 2025.
NASSCOM is also proposing incentivizing talent development and skilling.Building on NASSCOM's initiative to inculcate a well-equipped and future ready workforce in the industry, they have recommended setting a budget of Rs 500 crore for the financial year for co-funding talent development and re-skilling in IT services.
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