New Delhi: The software sector will be able to meet the export target of $60 billion (Rs2,66,122 crore) by 2010 but the long term growth rate and profitability will fall on account of less government support and imposition of taxes, industry association NASSCOM said today.
“The present momentum should enable us to reach the target of $60 billion of exports in 2010. The software export industry will be able to meet the indicated export revenue of $31.6 billion this fiscal.
“But in the long run, with such discouraging policies, we expect a fall in growth rates and bottomlines, since the small and medium players in particular will be seriously impacted by these changes,” NASSCOM president Kiran Karnik told PTI.
The sector is reeling under the Budget hammering of a Minimum Alternate Tax (MAT) and there are no indications that the tax holiday will be extended beyond 2009.
Indian software and services (IT-BPO) exports will clock a growth of 32.6% to exceed $31 billion this fiscal, a NASSCOM review had said earlier.
Karnik said the industry was hopeful of an extension of the STPI scheme (Software Technology Parks of India) for 10 years beyond 2009. However, the absence of a decision on this, and the added tax liability in the form of MAT, would increase the relative attractiveness of other countries - which are offering many incentives - as locations for the IT software and ITES-BPO industry.