Software Piracy and India

Software Piracy causes USD 866 mln loss to Indian Govt.!

India is one of the leading countries in Software Piracy – Even today over 65% of Indians use pirated software on daily basis. Although, the rate of software piracy is coming down, it still is at a level where it causes Billions of dollars of losses to Software Manufacturers.

According to a recently released report by Business Software Alliance (BSA) , the commercial value of unlicensed software installed on personal computers in India touched USD 2.739 billion in 2010, whereas the global losses stood at USD 59 billion.

Now, some of you may be wondering – How does software piracy cause losses to Government ? It is basically in form of taxes which government pockets when a genuine software is sold – And taxes are quite steep for all software.

The BSA report pegs the losses caused due to pirated software to Government exchequer (in 2009) are US $866 million in net taxes, both indirect and direct.

Affects of Software Piracy in India

According to IDC estimates (in 2009), the software piracy in India caused:

• Loss of commercial value of unlicensed software totalled over US$2.27 billion causing the domestic economy to lose US$5.3 billion of software, services and channels revenues to software piracy.
• Consequently, the state exchequer tax receipts loss was roughly US$866 million at the current piracy and employment levels, as the industry lost its otherwise legitimate share of revenues to pirates.
• The indirect tax receipts would have contributed US$553 million from software (media and paper licenses) and services-related business transactions and direct tax receipts would be around US$313 million for the Indian economy.

The report goes on to suggest various measures that could be taken up to curb piracy in India, which includes amending laws to classify software piracy as a form of tax evasion.