Blow to SMEs in the industry, says Nasscom

Our Bureau

New Delhi, June 6

Even as the Empowered Group of Ministers today decided to retain the minimum land area requirement of 10 hectares and minimum built-up area of one lakh sq m for IT SEZs, the industry said that the move was a blow to SMEs operating in the software sector.

"From an SME perspective, it is a blow to SME companies in the software sector because it may render them uncompetitive vis-à-vis larger players who can comply with the area requirements and obtain tax benefits. Even if SMEs take up space in SEZs to avail of the tax benefits, they may be charged higher rentals," said Mr Sunil Mehta, Nasscom Vice-President.

The industry has also raised its pitch for continuation of the STPI scheme, which is headed towards the sunset clause by 2009-10, and to bring it on par with SEZ scheme.

"That will allow SMEs to continue to gain benefits that big companies will get," he said, adding that STPI scheme had resulted in healthy growth rates in the sector.

Mr Phiroz Vandrevala, Executive Vice-President of TCS, said that the industry planned to take up the issue with the IT Ministry.

"For big companies it may not make much of a difference, but smaller companies will have a problem," he added.

(This article was published in the Business Line print edition dated June 7, 2006)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.