Kerala CM moots restoration of STPI scheme for reviving IT growth

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Trivandrum: Kerala Chief Minister Shri OommenChandy has proposed to the Prime Minister of India the restoration of the Software Technology Parks of India (STPI) scheme for the revival of the IT industry in the country. In a letter addressed to the PM which was personally handed over during his meeting in New Delhi recently, CM said that the STPI scheme was one of the reasons for the success of the Indian IT industry and its discontinuation deprived several IT companies, especially those in the SME sector, financial means to fund growth.

The current global economic melt-down added to the woes of several small and medium companies and hence a strong case exists for the restoration of STPI scheme at least for the units in the tier 2 and tier 3 cities in India. Over 60% of the entire spending of software companies relate to employee salaries which are taxed and an additional levy in the form of corporate tax leaves very little for IT units in the SME sector to re-invest, increase headcount and grow, something which is absolutely critical to remain globally competitive. The Chief Minister added that every direct employment in the IT industry leads to four indirect jobs getting created for the common man and hence restoration of the scheme will be a major step in promoting inclusive growth within India.

The Chief Minister had earlier received a representation in this regard from the Group of Technology Companies (GTech), the industry body representing the software companies in Kerala, based on which he had taken up the issue with the PM.

In a statement, V K Mathews, Chairman GTech & Executive Chairman, IBS Group said, “We are extremely grateful to the Chief Minister for bringing to the notice of the Prime Minister, the single biggest problem faced by the IT SME’s and are hopeful that the Government of India will seriously consider the restoration of the STPI scheme at the earliest”.

Kerala has nearly 75,000 employees in the IT industry, majority of whom work for companies in the SME sector. Most of the IT companies in the State have been seriously impacted by the discontinuation of the STPI scheme. There is also a real threat that the economic problems affecting some of the major markets in the world would lead to the closure of numerous small and mid-sized IT units rendering several professionals jobless.

Kerala IT News

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