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DQW Bureau
23 Nov 2010

If India were to reduce the software piracy rate by 10 percent over four years, currently standing at 65 percent, says Keshav Dhakad, Chair of the India BSA Committee, it would create more than 59,728 new IT jobs, add $4.6 billion to the Indian economy as well as contribute close to $512 million in new taxes by 2013, with 76 percent of those benefits expected to remain in the local economy.

According to a study titled 'The Economic Benefits of Reducing Software Piracy' from Business Software Alliance (BSA) and IDC, if India were to reduce piracy by 10 percent over the next two years instead of four, it would boost the economic activity and tax gains by a further 32 percent resulting in producing $6,132 million in new economic activity by 2013 instead of $4,662 million and generate $676 million in new tax revenues instead of $512 million. Interestingly there has been a decline of almost 11 percent since 2004 when the software piracy rate stood at 74 percent which Dhakad terms as a 'slow decline rate'.

“This study clearly demonstrates that a slow pace in piracy reduction affects the overall economic growth of the IT industry in India, de-incentivizes local product companies' innovation efforts, undermines the Government's ability to collect legitimate taxes from legitimate software sales and fuels organized criminal activity linked with piracy. In terms of direct threats, it impacts users, including individuals, small and medium businesses, corporate and governments who face a serious threat to their PC security, besides financial and legal liability, and ensuing mitigating costs and the software manufacturers who lose their valuable and multi-billion R&D investments every year. This also reduces the ability of the software product industry to generate more local jobs and foster local business opportunities in the areas of sales, distribution, service, maintenance, advisory, training and application development, which depend upon the genuine software product eco-system. Needless to say, use of genuine software is in the benefit of all and there must be a concentrated effort by government, consumers, and the industry to reject, prevent and attack piracy,” said Dhakad.

The study covered 42 countries but in Asia Pacific, it looked at 13 economies, namely-Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.

As per the study, globally reducing software piracy by 10 percent points over the next four years would produce $142 billion in new economic activity in the 42 countries studied, with more than 80 percent accruing to local industries. The reduction would also create nearly 5,00,000 high-tech jobs and generate roughly $32 billion in new tax revenues worldwide.

In fact frontloading the gain by reducing piracy in two years (instead of the proposed four) compounds the economic benefits by 36 percent, producing $193 billion in new economic activity and generating $43 billion in new tax revenues by 2013.

Stuti Das


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