“About 1,500 small and mid-size firms would have to shut shop if the government does not extend the STPI scheme beyond 2009,” Electronics and Computer Software Export Promotion Council Executive Director D K Sareen told PTI on Sunday. The industry is already battling with incremental rise in the value of rupee against dollar, which has impacted their bottomlines by up to 15 per cent, he said. Besides, there are fears of a recession in the US which could adversely impact the the industry here.

ESC has about 5,000 IT and ITeS companies as its members. About 60 per cent of the total exports comes from just 100 firms. The STPI scheme, which provides tax holiday for export- oriented IT/ITeS firms, would expire by end of 2008-09. Software industry body Nasscom, in its pre-Budget memorandum to the finance ministry, had also suggested the tax holiday be extended up to 2019 to help sustain growth of the BPO sector.