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Indian IT-BPO “Disappointed” with Union Budget

by: Karen Cayamanda

Wednesday, March 2, 2011 | Outsourcing News |

The IT-BPO industry of India was disappointed with the imposition of the 18.5% Minimum Alternate Tax (MAT) on Special Economic Zones (SEZs) and stoppage of tax breaks in the Software Technology Parks of India (STPI), as mentioned by Finance Minister Pranab Mukherjee in his budget speech. These are both negative news for the $76 billion industry of the country, according to IT software industry body National Association of Software and Services Companies (Nasscom).

Small and medium-sized IT firms in STPIs are allowed to have a 10-year tax holiday with the goal of encouraging export-oriented economic growth.

Keshav R. Murugesh, Group CEO of WNS Global Services said government support is crucial to keep the current position of India in the global outsourcing market. He added that other outsourcing destinations such as China and the Philippines can pose a threat to India’s BPO advantage as they enjoy support from the government in terms of tax benefits.


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