Nasscom seeks Rs500 cr budget allocation for IT industry development

The National Association of Software and Services Companies (Nasscom) has suggested that the central government make an allocation of Rs500 crore in the 2014-15 budget for the overall development of the IT industry.

Nasscom will support and facilitate the proposed mission for nurturing technical entrepreneurship, skill development, improving infrastructure says Nasscom president R Chandrasekhar.

Addressing the media at a briefing during the Nasscom Big Data and Analytics Summit 2014 on Friday, Chandrashekhar said Nasscom has already presented its recommendations and suggestions to the government for taking pro-active initiatives in the IT industry, especially the small, but numerically strong start-ups.

He said the 15,000-odd and growing start-ups, although accounting only for 20 per cent of the industry turnover, needs hand-holding by the government and the industry. ''These start-ups are being established by young tech-savvy entrepreneurs who may not be very knowledgeable but they are required for the industry to grow. They require strong support from the government.''

Chandrasekhar suggested relaxation in regulatory procedures for these small ventures while also making a strong pitch for a reduced tax regime for the angel investors and venture capitalists supporting these start-ups. ''The government should support establishing incubation centres and help in early stage funding of these companies. This way the risk is reduced,'' he said.

The Nasscom chief pointed to the 10,000 crore start-up programme that has so far helped in funding 350 start-up companies so far.

He said the country enjoys 50 per cent share in global IT sourcing market while the industry contributes eight per cent of the country's GDP, adding, this figure would cross 10 per cent in the next five years.

However, for all this, the industry needs a ''suitable and transparent taxation and regulatory policies''.

''The technicalities are standing in the way. Industries and companies operate in multiple business locations. There are mounting litigations related to taxation issues which are not conducive for business environment. The government should consider the global practices and bring in clarity,'' Chandrashekhar said