Shri Pramod Mahajan, Minister for Information Technology on January 9, said that within the next 12 months the government would implement the entire recommendations of the IT task force reports submitted last year. He also stated that the Group on IT would finalise its recommendations within the next two months which would iron out the persisting problems which have not been resolved by the National Telecom Policy 1999 announced around six months ago.
Shri Mahajan said that the government has set up a cabinet committee on IT with ministers for commerce, information and broadcasting, telecommunications and IT as members, which will co-odinate with the various ministries in order to facilitate greater private investments in the field of tele-communications and IT.
Overseas takecovers by IT firms made easier
The government on December 27 allowed automatic approval for American Depository Receipts (ADR) and Global Depository Receipts (GDR) issues by software companies planning acquisition abroad.
Software companies will no longer have to seek approval from either the Special Committee for Overseas Investment or the government of India for floating ADRs/GDRs to finance takeovers, provided the annual value of the acquisitions is below $ 100 million and the acquiring companies have previously floated ADRs/GDRs.
The government statement added that 100 per cent of the issue proceeds would have to be used for funding acquisitions.
Following are the main concessions allowed to IT industry :
FREEDOM TO BYTE
l Automatic approval route opened for ADRs/GDRs by software companies to fund acquisitions abroad. l 100% of the issue proceeds will have to be used for acquisitions.
l Automatic facility available only to companies which have already floated ADRs/GDRs.
l Companies which have not floated such issues will have to obtain a one-time blanket approval from the Special Composite Committee.
l Annual acquisition limit set at $ 100 million for each company.
Government sets up IT advisory panel
The IT ministry on January 12 set up a 11 member committee comprising captains of IT industry to advise the government and promote IT applications such as e-governance, e-commerce, digital learning and other issues related to cyber activities. The committee will be headed by the union information technology minister, Shri Pramod Mahajan.
The primary role of committee was to identify areas in the sector such as investment prospects, build human resource expertise, foster research and development and generate employment opportunities to chart India's progress in its efforts to become an IT super power.
Ministry moots tax holiday for IT infrastructure companies
IT Vision 2010, an action plan formulated by the ministry of information technology, has suggested incentives like a tax holiday for companies that set up information technology infrastructure and complete depreciation on software and communication items used for setting up IT infrastructure. The plan aims to make India "a global information technology power and one of the largest generators and exporters of software in the world in 10 years".
The plan, which will be implemented in three phases, suggests the following policies to accelerate the growth of the Indian Infotech industry and help Indian companies become global players and increase foreign direct investments in India : l Tax holiday for companies engaged in setting up IT infrastructure.
l Tax rebate on investments made in debentures and equity shares of public companies engaged in providing IT services.
l Complete depreciation on software and communication items for setting up IT infrastructure within two years.
l Exemption of excise duty on local language-based computing products.
l Strengthening the indigenous capacity.
l Increased thrust on higher education.
l Increasing PC penetration and manufacture of low-cost PCs.
Venture capital inflows rise 120%
Venture capital inflows into the country are likely to grow by 120 per cent to touch Rs.3,200 crore during the fiscal 2000-2001. Venture Capital Funds (VCFs) have already injected Rs.1,400 crore in 1999, recording an impressive surge of more than 100 per cent over the previous year.
Going by these calculations, India would be attracting annual investments of $ 10 billion by 2008 to become one of the leading locations for the creation of technology ventures in the world, according to a report by the National Association for Software and Service Companies (NASSCOM).
In 1999, as many as 11 new VCFs were registered with the Securities Exchange Board of India (SEBI), taking the total number to 19.
IT Industry may register 23% growth
Domestic IT industry is set to witness a 23 per cent growth in 1999-2000 over the previous year, according to a research study called Map-IT conducted by IDC India. The study spanning 33,000 business establishments and households across 25 cities, has projected the size of the domestic IT to be Rs.15,398 crores in 1999-2000 of which home segment accounts for 9 per cent. Homes and home office and small and medium establishments have emerged as the most potential segments with likely growth of 64 per cent and 56 per cent respectively.
IT will be $ 100 b industry in 10 years.
The infotech industry is the fastest growing sector in India and is slated to grow to 20 times its current size to $100 billion by 2010. This was stated by the minister of parliamentary affairs and information technology Shri Pramod Mahajan on February 8,in his inaugural address at the `IT Asia 2000' expo held in New Delhi.
"The $100 billion target is not a daydream, if this industry could grow from $ 50 million to $5 billion in the last decade, my dream of taking it to a $ 100 billion industry in the next 10 years will not remain a mere dream," he said.
US relaxes controls on export of high tech computers
Bowing to Industry demands, US President, Mr. Bill Clinton relaxed controls for export of high performance computers to several countries incuding India which is one of 50 nations on the administration's restricted list.
In an executive order, Mr. Clinton said the administration would raise high performance computer export limits to 12,500 millions of theoretical operations per second (MTOPS) from the 6,500 MTOPS limit set last year to all countries except the so called rogue nations that are on the state department list of countries that sponsor international terrorism.
NRI panel set up to attract FDI for IT units
To attract foreign investment in the IT sector, the government on January 20 constituted a group, comprising NRIs, to formulate a global strategy. The eight-member group will be chaired by IT minister, Shri Pramod Mahajan.
The group's mandate will be to take note of emerging areas in IT and make policy proposals. The group will also update the ministry with the latest developments.