Centre Increases Investment Limit For High-tech IT Projects

New Delhi: The finance ministry has decided that semiconductor fabrication plants and manufacturers of other hi-tech information technology products will have to infuse a minimum of Rs 2,500 crore to avail of government incentives. It had earlier planned to peg the minimum investment for semiconductor fabrication projects at Rs 2,500 crore and Rs 1,000 crore for manufacturers of other hi-tech IT products. The finance ministry has also supported the Cabinet note, on giving fiscal incentive equal to 25% of the capital expenditure incurred during the first 10 years of a project. It has been proposed that this would be in the form of investment grant, tax benefit and interest subsidy, valued at 15% of the capital expenditure.The government is also working on extending the fiscal incentive package to hi-tech IT products'' manufacturers in the software technology parks of India (STPIs) by 10 years from the current limit up to March 2010. If the government considers North Block''s proposal, then this will be in line with its previous decision to give fiscal sops to high-technology IT products along with semiconductor units to be set up in the IT special economic zones. While the draft Cabinet note also talks about a few other IT products along with semi conductors for grant of fiscal incentives, it has now been suggested to review the hi-tech sector and make this list exhaustive to comprise all other existing and developing IT-related products.