Software piracy rate cut can see $3.1 Bn rise in revenues by 2011

Bangalore: If India reduces use of pirated software by 10 percentage by 2011, it could see economic benefits worth $3.1 billion (Rs12,555 crore) through expanded revenues and better productivity. It will add $208 million in taxes and create 44,000 fresh jobs, said Business Software Alliance (BSA) The claim is based on a study commissioned by BSA and conducted by research firm International Data in January.

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A previous study by BSA had estimated that India lost $1.25 billion in 2006 to software piracy, up from $367 million in 2003.

In 2007, India spent $16.1 billion on IT - mainly on computers, peripherals, network equipment, packaged software and IT services, accounting for 1.6 percent of gross domestic product, which supported more than 34,000 IT firms with more than 766,000 software service workers. It also helped generate $1.1 billion in IT-related taxes, as per BSA.

Lowering PC software piracy delivers economic benefits because other sectors derive revenue from working with, installing, servicing, and reselling software.

"Most of the benefits from lowering piracy stay within the country. The drop in PC software piracy will have ripple effects on the IT services and distribution sectors, besides impacting the Indian software industry," said Robert W. Holleyman, president and chief executive officer of BSA.

India's software piracy rate is more than double the global average of 35 percent, standing at 71 percent at the end of 2006.

India has been slow in lowering its piracy rate from 74 percent in 2004 to 71 percent in 2006 when compared with China that reduced its piracy rate 90 percent in 2004 to 82 percent in 2006.

A recent Union Budget announcement increasing excise duty on packaged software from eight percent to 12 percent is seen as a blow to efforts in reducing PC software piracy, according to industry insiders.