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Nasscom for more rational tax regime

NEW DELHI: Welcoming the mandate for the Congress-led United Progressive Alliance at the Centre, the National Association of Software and Service Companies (Nasscom) on Saturday said the new government should come out with a more rational tax regime to further boost growth in the information technology sector. It also called for more investments in major cities and towns to help expansion of the IT industry.

“In the current global economic environment, it is important that India has a stable and progressive political environment that can focus on long-term policies for the sustainable development of the country, even as it takes decisive steps to immediately put the economy back on a high-growth trajectory,” it said in a statement.

Underlying the need for some urgent policy changes, Nasscom said specific policy initiatives were needed to sustain industry’s growth through extension of tax benefits, particularly for small and medium enterprises (SMEs), besides removal of inequities and multiplicity of taxes on issues like fringe benefit tax and service tax.

The new government should continue and expand infrastructure development programmes across the country and build integrated IT-BPO townships, besides providing fiscal incentives for growth of the IT-BPO industry in tier-II and tier-III cities. A time-bound programme for extending broadband to all villages should also be implemented to provide Internet access to all citizens.

Highlighting the need for policy changes to enhance India’s competitiveness and attract foreign investment, it said the new government should develop public-private partnerships to accelerate implementation of the already-approved e-governance programmes and evolve appropriate new strategies, increase government IT budgets so as to provide a strong stimulus to the IT-BPO industry and to the economy. Nasscom has also sought implementation of nation-wide skill development programme and leverage IT expertise, both for enabling education and imparting employable skills that can be deployed in the industry.

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