The India Post Team, 10th June:A blueprint has been prepared to build IT investment regions for planned growth of the knowledge industry. In an effort to accommodate booming IT sector, the Government of India is proposing to set up separate investment regions complete with integrated townships to help in relieving the strain created by the sector in existing infrastructure. With demand for land, power, water, roads and utilities to meet the needs of the industry increasing, the seven cities are struggling to provide support infrastructure and other amenities.
There will be full-fledged facilities to set up IT offices, residential quarters for employees, schools, malls, post offices, multiplexes, hospitals, parks and recreational facilities. All this is aimed at cutting commuting time and increasing productivity. There will be no tax benefits for IT firms in the proposed regions. It will be up to states to offer incentives or concessions to woo investors or existing firms to relocate or expand their operations in the regions.
“The central government will partner with states to provide infrastructure and attract investments in allied sectors to build integrated townships with facilities to work and reside,” the Union IT Secretary Jainder Singh said.
Haphazard growth of the IT industry in Bangalore, Hyderabad, Chennai, Pune, Mumbai, Kolkata and National Capital Region (NCR) comprising Delhi, Gurgaon, Noida and Faridabad has put enormous pressure on infrastructure, civic amenities, transportation and public utilities.
“Though efforts are being made by state governments to decongest cities by asking the industry to explore tier-two and tier-three cities for homogeneous growth, the competitive nature of the industry in a global market and scope for attracting huge investments require long-term and integrated solutions,” Singh said on the sidelines of a technology summit, organised by the industry body National Association of Software and Services Companies (Nasscom).
“We hope to kick-start the process in the next six months. We have worked on the nitty-gritty of the plans in consultation with the user industry for implementation on public-private partnership (PPP) mode,” Singh said.
He said that it is for states to come forward to provide land, water, power and utilities, while the central government will provide connectivity, be it roads, highways, railways, bandwidth and allied infrastructure within its purview to build knowledge townships.
“The firms, however, will be eligible for tax benefits or incentives if they are set up under the special export zone (SEZ) or software technology parks of India (STPI) policies,” Singh pointed out.
Admitting that skill-based education and infrastructure were the twin challenges faced by the industry that has the potential to make India a global hub for IT services and back-office operations, Singh said his Ministry was working with the Human Resources Development Ministry to churn out talent pools for a strong knowledge workforce.
A joint study by Nasscom-A T Kearney on ‘location roadmap for IT-BPO (business process outsourcing) growth’ has identified 50 locations across the country with potential to set up the regions.
At the same time, cities like Bangalore and Gurgaon are projected to grow by 2.5 times in capacity and opportunity to meet the future demand.
“The Indian BPO industry is maturing and rapidly spreading—both in business and geographically, employing seven lakh professionals and generating US $11 billion in fiscal 2007-08,” Nasscom President Som Mittal said.