A study of the number of companies registered with the STPI in the State shows a declining trend because of the withdrawal of the tax holiday and the global recession, a senior executive said.

Between April to September 2009, a total of 39 new companies were registered with STPI Bangalore.

This number came down to 25 for April to September 2010, and was further reduced to 15 in April to September this year.

Speaking to Business Line, Dr Sanjay Tyagi, Additional Director, Software Technology Parks of India – Bangalore, said, “The STPI holiday scheme is gone and this must be the main reason why the numbers have gone down. It could also be due to the global recession.”

Dr Tyagi said that another reason could be the geographic constraints imposed on the scheme.

“The hallmark of the STPI scheme was the fiscal incentive and the fact that there were no geographic constraints. Now, things are tied down to a particular geography.”

He said that the Government needed to think and create a balance.

STPI was started in 1991 and in 2010-2011, the total revenues of all the STPI units in the country crossed Rs 2,04,440 crore.

Karnataka, the biggest software exporter in the country, accounted for Rs 65,423 crore (32 per cent) of this. As of March 2011, the Government scrapped the tax benefits that the companies under STPI got from the Income-Tax Act Section 10A, which meant that STPI-registered companies would have to pay tax.

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