The Hindu Business Line : Nasscom wants SEZ sops given to STPI units also

MERE creation of Special Economic Zones for the IT industry without extending similar advantages to units in the Software Technology Parks of India would be detrimental to the interests of companies located in the latter, according to Mr Kiran Karnik, President of the National Association of Software and Services Companies (Nasscom).

"Unless the Government addresses this important issue, small and medium enterprises would be at a great disadvantage and the IT industry overall would lose out to competition from other countries and potential outsourcing businesses," Mr Karnik said.

Speaking at Animation India 2006, Mr Karnik said Nasscom had taken up the matter with the Government and stressed the need for a re-look at the issue and appropriate corrective measures to remove the anomaly.

"We have suggested to the Government to extend the SEZ concessions offered to the STPI units and allow them to be on par with them. Then all companies registered as STPI units can avail themselves of the concessions offered to SEZ units. Unless this is done, large companies for instance, with inherent advantages, are better placed to locate new centres or even move to these SEZs, and small and medium companies would be hard pressed to keep pace," he explained.

In contrast, the Chinese authorities, apart from providing infrastructure to the new entrants, offer a slew of tax concessions and sops in salary for the first year of their operations.

Though Chinese software professionals may have some inherent disadvantage in terms of language, they have other advantages making them competitive," he said.

Infrastructure bottleneck

"Another area of serious concern is the increasing chocking affect we are witness to in most of the major cities. Planners need to step up efforts to address this from a long-term perspective rather than a near-term solution," Mr Karnik said.

As an industry body, Nasscom has been representing to Governments for a long-term solution, going beyond merely road widening, where the traffic would soon outpace it.

The solution does not lie in focussing attention on Tier II or III cities, but better town planning and spreading out the cities, he said.

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