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Union Cabinet Approves Software Product Policy

The Union Cabinet approved the National Policy on Software Products 2019 that aims to help the industry grow at CAGR of 40 percent to reach USD 70-80 billion by 2025 while creating employment opportunities for 3.5 million people.

“The policy aims to adopt a shift in strategy so that IT products also contribute equitably and significantly to the industry along with IT services,” Electronics and IT Minister Ravi Shankar Prasad said.

In a statement, the government said that initially an outlay of Rs. 1500 crore is being planned for various schemes under in policy in the next seven years.

Further, the policy proposes to create a Rs. 5000 crore fund with industry participation to promote emerging technology such as Internet of Things, Artificial Intelligence, Blockchain, Big Data and robotics. Of this, government contribution will be Rs. 1,000 crore.

Promoting ecosystem

“Software Product Development Fund’ will participate in venture funds having objectives aligned to this policy and so can leverage private investments targeted to promote software product ecosystem,” the government said.

The SPDF will be financially managed by a professional financial institution.

Presently, total revenue of IT-ITeS industry in India is pegged at about USD 168 billion (including e-commerce), with revenue of about $7.1 billion from software product industry, of which USD 2.3 billion is from exports.

Tenfold rise

The policy, which aims to increase share of Indian software products in global market by tenfold, pitches for nurturing of 10,000 technology start-ups in software product industry, including 1,000 such start-ups in tier-II and tier-III towns.

It also proposes up-skilling of 10 lakh IT professionals as well specialize 10,000 professionals to “provide leadership.”

The policy also proposes a programme to encourage innovation to solve societal challenges. “The objective of the programme will be to promote IP driven software product entrepreneurship. The programme with a budgetary outlay of Rs. 500 crore will provide financial support to MSMEs and will have matching contribution from the government and the industry,” it said.

In a separate decision, the Cabinet Committee of Economic Affairs approved the foreign investment of more than Rs. 5000 crore and up to Rs. 25,000 crore in the recently merged Vodafone Idea Limited as part of a proposed equity fundraising thorough a rights issue.―The Hindu

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