Trivandrum: Group of Technology Companies (GTech), the trade body representing the IT industry in Kerala has approached the National Advisory Council Chairperson, Smt. Sonia Gandhi for the restoration of the Software Technology Parks of India (STPI) scheme in tier 2 and tier 3 cities in India.
V K Mathews, Chairman GTech met Sonia today, during her visit to the city and apprised her of the critical need to have the scheme restored to prevent potential job losses on a massive scale in the IT industry, especially in the SME sector. The post meeting representation handed over to her speaks of the restoration of STPI benefits as the single biggest requirement of the Small & Medium (SME) IT companies across India and how, by doing so, the Government of India can, in a single stroke, prop up the sagging fortunes of an industry that is the largest employment provider in the private sector.
Sonia was apprised of the challenges facing the Indian IT SME companies in a fiercely competitive global market. Funds shortage for expansion was one of the critical concerns and the withdrawal of STPI benefits has dealt a body blow to small companies, it was explained. The profits earned from exports are re-invested to attain scale and if corporate tax is levied, it would deprive IT SME companies the financial means to fund growth; something which is critical to stay afloat.
It was pointed out that the IT industry contributes significantly to the Government exchequer. It was also clarified to her that the benefits of restoring the STPI Scheme to IT companies in the tier 2 and tier 3 cities far outweigh the negatives. Only 10% of Indian IT exports are from tier 2 & tier 3 cities, hence its restoration will have a negligible impact on tax collection.
“STPI scheme empowers small and mid-size IT units to operate without any geographical restrictions, unlike the SEZ scheme. Besides STPI scheme has a highly successful track record in terms of its implementation and administration, benefitting not only its intended recipients but also bringing in foreign exchange. We are extremely hopeful that Smt. Sonia Gandhi in her capacity as the Chairperson of the National Advisory Council will personally intervene in this matter”, said Mathews in a release.
Kerala IT News