Software Technology Parks in India (STPI) which was the future banyan tree for India's economic growth since 1992 has been scissored off in the plant stage before is grew into its usual self. The Budget 2011 is the reason .
In 1992 when India was in dire states with no foreign currency and covenanted its gold to London to borrow foreign currency for its daily payments, It basked on the ongoing IT sector and introduced the smart STPI scheme which provided the IT industries with a 10 year Tax holiday( It means Foreign IT companies can put up business in India for a small % of tax). This scheme acted in favor of our economic growth and made us grow from Rs 2.75 crore then to a Rs 3,00,000 crore now without having to shell any amount. But now our new budget does not allow any Tax incentives for STPI.
Thirty years back China too ran out of foreign currency. Then they introduced tax incentives on their strength "Manufacturing". Today the world can see Made in China label on many goods ranging from toys to electronic to anything you name. Its manufacturing sector has a turn over of around 2,500 billion dollars. In spite of this massive growth it continues with its tax incentives. Soon China can extract extortionate prices for its goods because no other country can respond as quickly as China.Why does not India get ideas from China be it their ban in the Olympics games and a comeback to no.4 position or this case of becoming world no.1 in manufacturing. Especially when India is going on so strong in this sector .
So why did budget 2011 take this decision when India could have grown on this?
The larger IT companies have been turning into real estate grabbers taking advantage of the SEZ scheme. SMEs have been neglected as they do not have any support. As the larger companies had access to ministers and could easily make decisions in their favor.
These large IT companies found in easier to have their own SEZ and save taxes. Hence they wanted this scheme out and relayed totally on the acquired land.
NASSCOM works in the interest of large IT companies, it is not really concerned about the Small and Medium Enterprises.
Probably these reasons has fueled the India against Corruption movement too.
What Happens next to India ? 3 - 4 years from now the IT sector will continue to rise because of the speed at which it is prospering but in future India might loose to China and Philippines (already No.1 in BPO sector).
If this happens the prominent growth of India might get amputated. All the SMEs will withdraw from India this will certainly result in job losses forget about creating new ones. Is India ready to take up such a challenge ? This decision is right or not, only time can tell but we can surely tell that growth cannot be expected at the rate at which it was earlier .
In 1992 when India was in dire states with no foreign currency and covenanted its gold to London to borrow foreign currency for its daily payments, It basked on the ongoing IT sector and introduced the smart STPI scheme which provided the IT industries with a 10 year Tax holiday( It means Foreign IT companies can put up business in India for a small % of tax). This scheme acted in favor of our economic growth and made us grow from Rs 2.75 crore then to a Rs 3,00,000 crore now without having to shell any amount. But now our new budget does not allow any Tax incentives for STPI.
Thirty years back China too ran out of foreign currency. Then they introduced tax incentives on their strength "Manufacturing". Today the world can see Made in China label on many goods ranging from toys to electronic to anything you name. Its manufacturing sector has a turn over of around 2,500 billion dollars. In spite of this massive growth it continues with its tax incentives. Soon China can extract extortionate prices for its goods because no other country can respond as quickly as China.Why does not India get ideas from China be it their ban in the Olympics games and a comeback to no.4 position or this case of becoming world no.1 in manufacturing. Especially when India is going on so strong in this sector .
So why did budget 2011 take this decision when India could have grown on this?
The larger IT companies have been turning into real estate grabbers taking advantage of the SEZ scheme. SMEs have been neglected as they do not have any support. As the larger companies had access to ministers and could easily make decisions in their favor.
These large IT companies found in easier to have their own SEZ and save taxes. Hence they wanted this scheme out and relayed totally on the acquired land.
NASSCOM works in the interest of large IT companies, it is not really concerned about the Small and Medium Enterprises.
Probably these reasons has fueled the India against Corruption movement too.
What Happens next to India ? 3 - 4 years from now the IT sector will continue to rise because of the speed at which it is prospering but in future India might loose to China and Philippines (already No.1 in BPO sector).
If this happens the prominent growth of India might get amputated. All the SMEs will withdraw from India this will certainly result in job losses forget about creating new ones. Is India ready to take up such a challenge ? This decision is right or not, only time can tell but we can surely tell that growth cannot be expected at the rate at which it was earlier .
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