The government will do everything in its purview to maintain the advantage that Indian firms enjoy for exporting software.
Addressing a Nasscom gathering that included industry luminaries, the PM responded to a plea by Satyam chairman Ramalinga Raju to look at the STPI scheme 10A and 10B, which is coming to an end by 2009.
The scheme allows tax benefits to software companies located in STPI. Indian software exporters feel that if this scheme is not extended, then Indian companies will be forced to look at options outside the country.
"This would indirectly affect employment opportunities and would result in lesser job creation," said Raju.
He added that this would result in slowdown of growth in the Indian economy, which contributes about 8 per cent of India's GDP.
Prime Minister Manmohan Singh assuages such fears and said that the government has played a marginal role in the growth of the sector; it will play a more facilitative role to play in maintaining and building India's competitiveness.
India faces competition from countries such as China, Malaysia and Philippines as alternative destinations for software exports.
"While, these countries cannot match the scale that India possesses at the moment, in a few years they will be a more formidable threat," said Lakshmi Narayan of Cognizant.
{{/usCountry}}"While, these countries cannot match the scale that India possesses at the moment, in a few years they will be a more formidable threat," said Lakshmi Narayan of Cognizant.
{{/usCountry}}The PM also urged the Indian IT fraternity to be more ambitious. "While Nasscom has set an export target of $60 billion by 2010, considering the way in which our economy and exports are rising, this target should be met by 2008 and by 2010 we should look at a target of $80 billion," he said.
The PM urged the Indian IT industry to move up the value chain, BPOs eventually become KPOs and thereby increase India's share in the global market.
Currently India has about four per cent of the global IT market.