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

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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.software piracy

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.

My view

To be honest, I don’t agree that strict measures should really be taken – instead it is important to look at why there is such a huge demand for pirated software in India. There is a one single reason – Steep software cost.

Infact, there are thousands of people who earn their living off pirated softwares – They don’t have an option – and they will be out of business if they are forced to buy genuine softwares at huge costs. Can you imagine a graphic / flash designer spending lakhs of rupees on buying genuine Adobe products without which he cannot do anything. He will be out of Business…period

What is your opinion ? Should Government take strict measures on curbing software piracy?

"Software Piracy causes USD 866 mln loss to Indian Govt.!", 5 out of 5 based on 1 ratings.
  1. Kunal Ranjan says

    please frndz stop it.

  2. Amit says

    Well the USD 866 mln loss is calculated on the assumption that people would have bought the software. I doubt if people had to pay for the software, there would be hardly 1% of the “lost” revenue armount for the government as not many people would buy the software.

  3. Jagdish Thakre says

    Have we forgotten that BSA is a paid stooge of Microsoft, Adobe and a bunch of other powerful software companies. Most of the dollar numbers they come up with have no basis and are often pulled out of thin air. Did we also forget they threw some similar astronomical numbers about the piracy rates in Canada a couple of years ago?

  4. Devang Oza says

    Sajiv Kurup Its all because of you :)

  5. Indiran says

    @Arun Prabhudesai, I completely agree with your opinion. Also note that software manufactures and government will be benefited even if the pirated software are used by Indians. Just think in this scenario – Suppose Microsoft or Adobe is not allowing to use of pirated software and taking strict action against the users of pirated software, then no one will learn and get knowledge and use that software. So automatically usage of the products will drastically come down, and the usage of open source software like Ubuntu, Open SUSE, PhotoPlus, GIMP etc. will increase hugely. Because of this corporates will not buy these paid software due to the demand of the personals those who have knowledge about these softwares. If government is taking strict action on individuals for using pirated software, then it will affect the GDP of the country. Hence Government and software manufacturers should not force individuals in this matter.

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