ESC asks Government for Tax Benefits for SMEs in the IT sector | SupportBiz

Policy Notes

ESC asks Government for Tax Benefits for SMEs in the IT sector

 

 

As per a report in SMB.in

The Electronics and Computer Software Export Promotion Council (ESC) has asked the government to extend tax benefits to SMEs in the IT cluster, on par to those given to companies in Special Economic Zones (SEZ), reported IANS.

After the Software Technology Parks of India scheme was withdrawn last year, SMEs have been less than enthusiastic about starting up in the IT clusters.  Benefits, like the ones given to big firms in SEZs could prove to be a boost to the exports by SMEs in the IT sector.

IT exports during 2010-11 were $66 billion with $57 billion in software and $8.86 billion in hardware. The ESC is expecting a growth of 22.47 percent in IT exports in 2011-12. By December 2011, hardware exports stood at 70 percent while the software sector clocked in 80 per cent exports.

The US is the biggest market for Indian IT exports. With the US economy now looking up, the IT industry can look forward to healthier growth. ESC is looking at a ten percent growth in hardware and a 24.38 percent growth in software exports.

DK Sareen, Executive Director of ESC, said that Japan is the second largest software market and it accounts for only three percent of the exports from India. This gives India tremendous potential for growth. There is also potential in promoting exports in emerging markets, like Africa, which currently accounts for four to five percent of the country’s exports.

Sareen also mentioned that India has great resources, physical infrastructure, manpower, ideas and all the other requirements to grow in the IT sector.