Praveen Kankariya, CEO, Impetus Technologies said, “The sunsetting of the STPI scheme will tilt the playing field completely in favor of large companies - large companies can afford to move into SEZs while the small companies cannot. While we all know the large Indian companies, let us not forget that the fastest growing large Indian companies are subsidiaries of MNCs like IBM and Accenture”.

Kankariya feels that the next generation of Indian IT, or IT 2.0, will originate from small, innovative and entrepreneurial companies. “If we do not provide the benefit of an STPI like scheme to these budding companies, how will they become Infosys of tomorrow? Taking these advantages away at this nascent stage will hurt us in the next decade,” he said.

According to Kankariya, the IT industry is paying taxes way beyond most industries, indirectly. He said, “Per capita wages are one of the highest in the IT industry and thereby the payroll taxes (TDS) deposited as well. Wage inflation has taken place to such an extent that the profitability is now comparable to post-tax profits of other conventional industries-imposing a tax will make many of these companies unviable.”

Kankariya does not expect the exchange rate to ease further. “Let us keep the benefits in place for another five years and not ruin the torchbearer of our services exports. We have barely become a dominant player in IT 1.0, and we need this support to let us continue our successful march into IT 2.0,” he said.