The Hindu Business Line : Raja for extending tax sops to STPI units by 3 more years

(from right) Mr Manoj Kohli, Chairman, CII National Committee on Telecom and Broadband; Mr S. Mahalingam, Chairman, Connect 2009; and Mr A. Raja, Union Minister of Communications and IT, at the inaugural session of the ICT event, organised by the CII, in Chennai on Friday.

Our Bureau

Chennai, Sept. 11 The Union Minister for IT and Communications, Mr A. Raja, favours extending the tax benefits enjoyed by information and communication technology firms in Software Technology Parks by a further three years from 2011.

The extension of tax benefits is pending Cabinet approval, he said in his address at Connect 2009, a two-day ICT event organised by the Confederation of Indian Industry (CII) in association with the Government of Tamil Nadu. The theme of the event is ‘Resurgence of the Indian ICT Sector’.

The Centre is focusing on developing semi-conductor fabrication hubs across the country, and seven projects involving an investment of Rs 70,000 crore have been approved, Mr Raja said. The Government has decided to invest 20 per cent of the total cost of each of these projects as incentive for the sector, he said.

In his keynote address, Mr Kip G. Thompson, Vice-President, Global Facilities and Strategic Growth, Dell Inc, said India was at an inflection point. With right government incentives and policies, it could create “an irresistible investment environment and become a world-class IT hub,” he said.

“This is the right time, else you will lose the race to the top,” Mr Thompson said.

Compared with China, Malaysia and Singapore, India has the additional advantages of proximity to Europe, West Asia and the African markets and English language competency, he said.

According to Mr Manoj Kohli, Chairman, CII National Committee on Telecom and Broadband, and the CEO and Joint Managing Director, Bharti Airtel Ltd, the telecom sector could restore India’s GDP growth to 9-10 per cent from the current 6 per cent.

Broadband would be a key to economic growth and its penetration has strong correlation with GDP growth.

Despite having around 500 million telecom users, there were only 7 million broadband customers — currently, just 1 per cent of households and 18 per cent of businesses have access to broadband, he said.

For the Government to achieve its 2014 vision of reaching broadband to 214 million users, it needs to achieve 30-fold growth, which was quite a challenge. Since broadband has the potential to create about 20 million jobs, the Government should be committed to e-governance projects and move from providing voice-led to data-led services, he said.