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Fifth, the rapid expansion of small software companies (50-90 percent annually)
presents expansion risks unfamiliar to financial institutions in India, and further
increases the need for working capital.
However, the most important factor which would help in the growth of
the domestic software industry is the extensive proliferation of computers in
this country. For this, the cost of computerization should be substantially reduced.
This can be done by abolishing the import duty on software. Also, the import
of hardware should be made easy by removing the arbitrary limit of Rs. 1.5 lakh
as value limit.
The import duty on computer systems should be kept at a minimal level. Provided
these initiatives are taken, the domestic software industry in India can enjoy
substantial growth.
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