Industry welcomes FinMin decision

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BANGALORE, INDIA: The IT industry has welcomed finance minister P Chidambaram's announcement to extend tax holiday by a year for the Software Technology Park of India (STPI) scheme.

However, some companies while greeting the decision opined that an extension for a longer period would have been better.

S Mahalingam, CFO and ED, TCS

As an industry, we have the confidence to continuously invest heavily in the growth of the economy and create hundreds of thousands of skilled jobs in the country. In this context, the extension of the STPI scheme until 2010 will further strengthen the IT industry and hopefully, pave the way for further extensions.

V Balakrishnan, CFO, Infosys Technologies

This is a good move and would benefit the small and medium sized companies who are finding it difficult to move into SEZ space. Most of the larger companies are already pursuing their SEZ plans aggressively. This move will enable them to enjoy the tax benefits further for a period of one year on their revenues derived from their existing STP operations.

Srinivas Vadlamani, CFO, Satyam Computer Services

The extension of STPI benefits by one year is definitely a welcome move while an extension for a longer period would have definitely been more welcome. It could not have come at a more appropriate time, as the sector is grappling with the twin effects of the unprecedented surge in the rupee and uncertainty in the US economic landscape.

Swaminathan Krishnan, SVP (Global Business Operations) & CMO, Sasken Technologies

The extension is too short. One-year does not make a big impact. One-year horizon is pretty short term in planning cycle. I would have preferred a much longer period. Five-year extension would have an impact for the industry.

Rostow Ravanan, CFO, MindTree Ltd.

We are happy about the announcement, although a longer extension would have been more welcome. Overall, the extension is beneficial to the industry as a whole, particularly to small and medium firms.

N Ramachandran, CFO, iGATE Global Solutions

The extension of tax holiday for IT companies has been very timely and will help face the impending challenges of prevailing global economic uncertainties as well as strengthening Indian rupee. We do hope that the government takes a re-look at the whole scheme of tax holiday and formulates a more stable longer-term tax incentive structure that can be one of the enablers for the Indian IT sector to move up the value chain and attain the next level of dominance in the world market.

Archana Srinivasan, VP, Finance, Cybernet-SlashSupport

This step will give some reprieve to the STPI units and also help them retain their competitive edge especially in the current market scenario of the fluctuating rupee.

JA Chowdary, MD, NVIDIA Graphics Pvt. Ltd.

It is definitely a good decision especially for small and medium enterprises. The large companies have benefited for a long time and have their own campuses. Now, small companies should not be denied of this and this extension should be for a longer period. But we are happy that it has been extended for at least another year.

Ravi Pandit, chairman & Group CEO, KPIT Cummins

This is a welcome move for the entire industry, which is currently under a lot of pressure due to the strengthening rupee and weakening US economy. Moreover, the STPI scheme holds a special importance for the smaller companies as it provides an impetus for accelerated growth.



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