STPI: Need of the hour

Mamata Banerjee
Chief Minister 
West Bengal  

The Software Technology Park of India (STPI) scheme, launched in 1991, played a pivotal role in elevating India as an IT superpower but was withdrawn by the government last year. 

With the economic uncertainties looming large, STPI (Software Technology Parks of India) scheme, which is a 100 per cent Export Oriented Unit scheme with tax benefits under the Income Tax Act and with facilities such as single-window clearance, has once again come to the forefront of conscious attention.  Some state governments including West Bengal are pitching for the revival of the STPI scheme which ended on March 2011. IT firms were offered Income Tax as well as local tax exemption for setting up units under the STPI scheme. 

The role of STPI in establishing India as an IT powerhouse is well-known. The $100-billion Indian software and services industry contributed significantly to the Indian economic growth story, creating over two million direct jobs and accounting for 25 per cent of the country's merchandise exports, generating $69 billion in fiscal 2011-12.

What is STPI?

Established in 1991 and registered as an Autonomous Society under the Department of Information Technology, Ministry of Communications and Information Technology STPI has commendable job in increasing exports, employment and investment for the software sector.  STPI was set-up to implement the STP Scheme and to promote software exports by providing infrastructure facilities including High Speed Data Communication (HSDC) links. 

The overall exports increased from Rs 205505 crore in 2009-10 to Rs 215264 crore in 2010-11.  Since the demand for land in creating a STP is much less than the sector-specific and multi-sector SEZ, the STPI scheme also proved beneficial for the small and medium enterprises who can operate without any geographical restrictions. 

West Bengal gives Infosys STP Park status 

Partha Chatterjee
Minister for Commerce & Industries, West Bengal

West Bengal government has offered Infosys the status of a software technology park (STP) instead of the SEZ status demanded by it. According to the State IT minister Partha Chatterjee, the STPI scheme provides IT companies with an array of tax benefits. 

Special Economic Zones (SEZs) were announced as an alternative to STPI with much fanfare. But as is being observed it has not able to have the desired effects. Bihar government has also opposed the SEZ. As a matter of fact Minimum Alternative Tax (MAT) on SEZ income discourages firms from opting for SEZ. 

The objectives of the Software Technology Parks of India are: 

(a) To promote the development and export of software and software services including Information Technology (IT) enabled services/ Bio- IT.

(b) To provide statutory and other promotional services to the exporters by implementing Software Technology Parks (STP)/ Electronics and Hardware Technology Parks (EHTP) Schemes and other such schemes which may be formulated and entrusted by the Government from time to time. 

 (c) To provide data communication services including value added services to IT / IT enabled Services (ITES) related industries.

 (d) To promote micro, small and medium entrepreneurs by creating conducive environment for entrepreneurship in the field of IT/ITES.