NEW DELHI, May 7: Indian software industry registered a 52.7 per cent growth in 1996-97 to report total income of approximately Rs 6,400 crore or US$1.8 billion.

Software exports from India was up 54.7 per cent at Rs 3,900 crore against Rs 2,520 reported in 1995-96, according to initial estimates of a survey conducted by National Association of Software and Service Companies (Nasscom).

The domestic software industry grossed revenue of Rs 2,500 crore reporting a growth of 50 per cent from the 1995-96 levels of Rs 1,670 crore.

Addressing a press conference here on Tuesday, Nasscom executive director Dewang Mehta, the industry could have registered higher growth if the United Front government had not imposed minimum alternative tax (MAT). ``Imposition of MAT on software exporters has reduced the competitiveness of Indian software export.

If MAT had not been imposed, the industry would have shown higher growth rates.''He added that the software exporters seeking exemption under Section 80 HHE of Income Tax Act should not be brought under the purview of MAT. Mehta stated that the Indian software industry is expected to cross the $3 billion mark this financial year. Exports are expected to grow 55 per cent this year.

The Year 2000 date conversion projects added to the growth rate of software exports from India. Nasscom estimates that during 1997-99, Indian software industry may corner a market of more than $2-5 billion global opportunities in Year 2000 conversion projects.

Mehta added that during the 1996-97, over 131 Fortune 500 companies chose to outsource their software requirements to India. The growth in the domestic market during 1996-97 was possible primarily due to reduction and later elimination of import duty on software and also due to anti-piracy campaign. Nasscom estimates that software piracy levels came down to 60 per cent during the year from the previous years level of 68 per cent.

The domestic software could have crossed the Rs 2,800 crore level had it not been for the sluggishness in the market and the economy on the first quarter of this calender year, Mehta said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.