The National Association of Software and Services Companies (Nasscom) has recommended the setting up of a new funding body for start-ups in the field of IT, which are focusing mainly on research and development.

Nasscom says that the new fuding body should be created in line with the Department of Scientific and Industrial Research (DSIR). Sharad Sharma, Nasscom product conclave's chairman said that the Small Industries Development Bank of India has become more active and the Department of science and technology of the government is offering funding for allowing prototypes to reach commercial stages.

"The demand comes as the Indian IT now wants to leap frog from being only a service provider to a full-fledged product companies," Sharma said. Nasscom wants a separate body for R&D start-ups in the country.

According to the estimations of the Planning commission, the It industry in the country will between 18 per cent and 30 per cent by 2020. Sharma believes that about half of the growth will be contributed by SMEs. Nasscom says that SMEs will see an increase in demand for SAAS (Software as a service) in the next 10 years

"Big activity is also happening in the supply side. It is similar to what has happened in the small car-manufacturing sector. This phenomenon will repeat itself for SAAS in SMEs", added Sharma.