‘Decouple It/ITES from BPO Sector’

Among a slew of pre-budget meetings usually held by lobbying groups to press for their demands to the government, the Business Process Industry Association of India (BPIAI), the industry’s umbrella body, has demanded for the extension of the STPI (Software Technology Parks of India) scheme to offset the cost disadvantages that have accrued to the sector due to rupee appreciation. STPI is a society set up in 1991 by the Ministry of Communication and Information Technology, with the objective of promoting software exports, primarily, by granting tax holidays. Interestingly, the association has asked for the extension of the scheme by 20 more years.

“The abrupt rise of the rupee against the dollar and pound has left many young BPO firms gasping for breath. If the tax sops emanating from the STPI scheme also disappear, then this might make investors avoid India and move to China, Sri Lanka, and Philippines,” said BPIAI president Samir Chopra. Arguing that the IT sector has enjoyed tax breaks for over 30 years whereas the BPO industry being 5 years old has had very little time to benefit from this Chopra concluded, “Steps must be initiated to decouple the IT/ITES from the BPO sector.”