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May 28, 1997


Red tape at software parks cut

The government has cut the red tape involved in getting a project approved under the Electronics Hardware Technology Park and Software Technology Park schemes.

It has also reduced the stipulation for amendments in specifications once the project is approved by delegating more powers to STP directors and other designated officials.

The move, according to a statement of the industry ministry on Monday, is an effort to speed up work in the quickly changing electronics sector. The EHTP and STP schemes aid the manufacture of hardware and software solely for export purposes.

Till now, proposals to set up units under these two schemes were considered by an inter-ministerial standing committee under the chairmanship of the secretary of the Department of Electronics.

The new procedures stipulate that project approvals should come within 15 days of the application being submitted, as long as certain conditions are fulfilled.

Conversion of domestic tariff area units into export-oriented units would be allowed where there is no outstanding export obligation or advance licensing schemes and that the DTA units fulfil conditions for approval.

Once approval is given, some specific kinds of amendments can be made by STP directors or EHTP officers. This apparently reflects government understanding of needs to modify the project during implementation.

So additional import of capital goods worth up to 50 per cent of the value approved will be allowed, subject to a maximum limit of Rs 100 million.

The officers will also have the power to attest the list of imported CG required for the project.

Applicants for EHTP proposals will be allowed to manufacture items other than those specified in the approval letters if the items fall in the hardware category, if the design and production facilities are common and the imports of capital goods are within stipulated limits.

Change of location will also be allowed if other terms and conditions of approval are not tampered with and if the new location is within the jurisdiction of STP directors and does not overstep locational policy.

The officers can also extend for a year the validity of letters of permission or intent to enable an entrepreneur implement a delayed project.

They can also permit disposal of obsolete capital goods on payment of applicable duties, as long as the machinery is used for five years. They can also permit the import of office equipment worth up to 20 per cent of the total capital goods value approved, subject to a maximum of Rs 2.5 million.

- Compiled from the Indian media

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