Nasscom roots for transparency

Hyderabad: With the IT industry witnessing a growth rate of almost 13.2 per cent in FY 2013-14 and set to grow at 13-15 per cent during the current year, the Nasscom has  outlined key recommendations to the newly formed government.

“The industry is set to grow from 8 per cent to 10 per cent of GDP in next 4-5 years and it accounts for 25 per cent of exports. It is also a major creator of jobs and driver of urbanisation, so it is important that the current government recognises its potential and makes predictable, stable and transparent taxation and regulatory policies,” said R. Chandrashekhar, president, National Association of Software and Services Companies (Nasscom) on the sidelines of ‘Big Data and Analytics Summit’, 2014 on Friday.

The 200 global companies account for 80 per cent of the industry turnover of $118 billion, the government should make changes in the taxation policy and benchmark their norms and laws against the global standards. Also clarity needs to be provided on the issue relating to royalty on software, added Mr Chandrashekhar.

 There are about 15,000 start-up and small companies that contribute the remaining 20 per cent of the revenues.  

Talking about the challenges faced by this sector, he said, “For start-ups, they should be provided with incubators and given early stage funding, where the government is part funder. We also want the Centre to setup a '500 crore worth Technology entrepreneurship mission.”

Nasscom, as part of its 10K start-up initiative, has facilitated funding to about 350 companies, said Mr Chandrasekhar adding that the regulatory environment was generous for the start-ups considering the difficulty in starting a company and later due to compliance.

Finally, he added that the slow growth rate of the domestic market should be revi-ed and that poses a major challenge for the industry, he said.