MUMBAI: A small but critical notification awaited from the state government for continuation of the Maharashtra IT, ITeS policy is holding back major office space and other key transactions in Mumbai, Pune and some other cities.

The tenure of the policy, which offers several benefits to IT and ITeS companies, including 75% waiver on stamp duty charges on office space transactions, expired in August. It is expected to be vetted by the state government with any amendments and modifications after every five years.

"Without the policy being in place, all IT companies are facing problems in executing transactions as these companies will be treated differently for tax and revenue purposes," said AD Nerurkar, a consultant serving companies such as Tata Consultancy Services and Tata Consulting Engineers.

With the election code of conduct already in effect, the state government may take longer to push for continuation of this policy, resulting in loss for the exchequer as well as troubles for software companies.

This has come at a time when companies are undertaking expansion plans for an uptrend in business and it may prompt companies, particularly new entrants, to consider other states like Gujarat or Karnataka for setting up offices.

Some state government officials, how ever, say the policy is ex pected to get an extension of around six months. "A proposal for six months ex tension for the current policy is under con sideration at industries, energy and labour department," said an official of directorate of industries.

"Draft for the new policy is also ready but that needs to be taken up for approval by the Cabinet that will now get formed after the election results," the official said.

Rajiv Vaishnav, vice-president at IT industry body National Association of Software and Services Companies (Nasscom), said, "Based on our interaction with the ministry officials, we understand that an extension to the cur rent policy is under consideration and it will get extended positively. However, the information is not public now and that's a concern." According to a Nasscom report, nearly 90% of the IT-BPO industry in India is concentrated in and around seven cities, including Mumbai and Pune in Maharashtra. The report had identified Aurangabad, Nagpur and Nashik among emerging new cities with high potential for the IT sector.