(i) From an amount of Rs.750
crores of working capital for the IT Products
industry during 1998-99, the amount will be increased
to Rs. 2000 crores by the year 2000-2001. A system
will be put in place which would enable adequate
increase in working capital provided by the banks.
(ii) IT products and related IT
Services industry will be treated as a Priority
Sector by banks for the next five years. This would
help to meet the requirements of IT Products and
related service exports, and also the IT industry and
applications within the country. Major banks will be
advised to create specialised IT financing cells in
important branches, where IT units are sufficiently
large in number. Performance in this dimension will
be monitored by the Ministry of Finance.
(i) The banks will be allowed
to invest in the form of equity in dedicated venture
capital funds meant for IT industry.
(ii) Banks like ICICI and
TDICICI will set up joint ventures with Indian or
foreign companies for setting up at least two
different venture capital dedicated funds of a corpus
of not less than Rs.100 crores each to cater to the
credit need of the Hardware industry.
(iii) Venture capitalists will
be allowed to set off losses in one invested company
and profit in another invested company during the
block years for the purpose of income tax.
(iv) All IT products and
related services will be considered eligible for
exemption under section 10(23)F of the Act for
venture capital investment.
The term "Computer
Software" shall be replaced by "IT Products
including IT Software and IT Services" in the
explanation of the term 'Venture Capital Undertaking'
appearing below Section 10(23F).
v) The NSE threshold will be
reduced to Rs. 1 crore level for the IT industry.
vi) Other recommendations given
in Annexure-V will be maximally accommodated.
