New Delhi: Software industry association Nasscom wants the new government to maintain the growth momentum in the IT industry through extension of tax benefits, removal of inequities and multiplicity of taxes like FBT.
Nasscom chairman Pramod Bhasin said that specific policy initiatives like extension of tax benefits, specially for SMEs, and removal of inequities and multiplicity of taxes like fringe benefit tax (FBT) and service tax need to be pushed for.
Bhasin also called for an overall uniform policy environment to enhance India’s competitiveness and to attract foreign investment.
He said in the current global economic environment, it is important that the country has a stable and progressive political environment that can focus on long-term policies for sustainable development of the country.
Nasscom has been seeking extension of software revenue tax benefits for a few more years. The benefits, ending in March 2010, would hit the earnings of companies, with the tax outgo raising.
In 2005, the government had imposed FBT, levying on prequisites provided to their employees. IT industry had opposed the move as they offer their employees a lot of such benefits.
Bhasin said the new government should also lay stress on computer penetration and on Internet access for masses.
“The government should initiate time-bound programmes for extending broadband to all villages as mentioned in the Congress manifesto, so as to provide Internet access to all citizens, and back this up with steps to increase computer penetration,” he said.
He added that a comprehensive nation-wide security programme should be taken up among the top three priorities of the government.
Bhasin stressed the need for developing public-private partnerships to accelerate implementation of the already approved e-governance programmes and increasing government IT budgets to provide a strong stimulus to the IT-BPO industry.
Nasscom also expected the government to leverage international relations and build perspectives with key developed nations for continued bilateral trade development with no deviations on protectionist moves through visas and taxation.
Bhasin said efforts should be made to continue and expand infrastructure development programmes across the country and build integrated IT-BPO townships and provide fiscal incentives for growth of the IT-BPO industry in tier II tier III towns.
Hardware, training and research and development services sector representative body Manufacturers Association of Information Technology (MAIT) also expressed similar views.
MAIT said it expects the government to increase the number of programmes in the mission mode projects.
“The focus on including IT in education, e-Governance programmes, broadband, WiMax and 3G are some areas that the government should look into for promoting growth in the industry,” MAIT executive director Vinne Mehta said.