Indian IT firms want policy continuity despite government change
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Indian IT firms want policy continuity despite government change

Monday, 24 May 2004, 07:00 Hrs
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NEW DELHI: India's high-profile IT companies are not in favour of changes in their operating environment after a political shake-up that swept a Congress-led coalition with support from Left parties to power.

Analysts and industry representatives say the new government must continue with policies that have helped India emerge as the electronic housekeeper to the world and earn billions of dollars every year from exports.

"The most important point in terms of priorities for this government is to make sure they don't do anything negative," said Kiran Karnik, president of the National Association of Software and Service Companies (Nasscom).

"The continuation of existing policies is very important. No new taxes should be introduced and no new measures should be taken that can disrupt growth in the sector," Karnik told IANS.

"We are certain the new government will continue the excellent support to this sector that we have received in the past, both in terms of infrastructure and favourable policies."

Though previous Indian governments did encourage the software industry, India's IT and BPO companies like Infosys Technologies and Satyam Computer Services have largely grown on their own competitive strengths.

India's IT market has grown from $1.73 billion in 1994-95 to $16.5 billion in 2002-03, accounting for three percent of the country's gross domestic product.

While the IT industry is positive the government will not turn its back on the software sector, one of the brightest spots in the Indian economy, it wants the coalition to focus on improving infrastructure and increasing IT penetration.

On the IT industry's wish-list for the new government, headed by Oxford-educated economist Manmohan Singh, Karnik said the focus must be on improving power, roads and airports that provide the backbone for the booming IT-enabled services.

"Telecom costs in India are very high and there is scope for the government to do something on this front. Education is another area that needs a great deal of attention to ensure that India's competitive advantage stays," he noted.

Sameer Kochchar, chief executive of Skoch Consultancy Services, a New Delhi-based IT industry research firm, urged the government to take urgent steps to formulate stringent data protection and intellectual property laws.

"India doesn't have any data protection laws. The government needs to do something in this area to make sure the country's competitive advantage in the IT sector and especially in the business process outsourcing business doesn't get eroded."

Experts say India can emerge as a global research hub for a vast spectrum of industrial sectors, ranging from biotechnology to information security solutions, by creating a strong intellectual property and data protection regime.

Kochchar said the government must take the initiative to increase IT penetration across the country by earmarking enhanced investments for e-governance and using technology in agriculture and rural development works.

"The government will have to clearly spell the norms of investments if it wants to engage the private sector in e-governance projects and other activities to take IT to the country's rural areas," he said.

The government accounted for nine percent of the total IT spend in India in 2002, which is estimated to go up to 15 percent over the next five years, says a Nasscom study report.

On the growing backlash in the West over shipping of technology jobs to India, Karnik felt the government should stay out of the debate and let market forces decide the positives and negatives of outsourcing.

"The best is government stays out of the outsourcing issue. It is not an India-US or India-Britain issue, it is a purely economic issue. It should rest with the companies involved," he said. "We don't want politicisation of the issue."




Source: IANS
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