The Software Technology Parks of India has appointed consulting firm Deloitte & Touche to prepare an incentive scheme for companies in software parks, but only for those in smaller cities.

"We have just employed Deloitte to prepare an incentive scheme which will help existing units STPIs in tier II and III cities," STPI director general Omkar Rai said on Wednesday at an IT seminar organised by CII.

"It will help dispersal of IT industry in smaller cities and also support STPI-registered units which have not come under SEZs as well as other units which are not covered under any incentive scheme," he said. Rai said modalities were being worked out and they were hoping that in another three months they would be ready.

As per the latest government guidelines, the tax benefit under section 10A and 10B will stand withdrawn from March 2012. Apart from tax benefit, other benefits would continue. However, the IT industry believes that tax withdrawal would hit the small and medium sized IT firms in the country hard.

This incentive scheme is seen as an alternate scheme to compensate the STPI units, but the same would be restricted to those units located in tier II and III cities. Rai said the incentive scheme could be in several forms like reimbursements and incentives based on employment generated. There are a total 51 STPIs in the country which have a combined strength of some 7000 units.