Policy Watch: Keying in the Right Program?

POLICY WATCH
Keying In The Right Program?

States are drawing up impressive information technology policies. Will these glossy brochures lead to anything?

By Team BT

Two days before the first National Conference of Information Technology Ministers, the government's media managers were hard-selling the fact that journalists could watch the proceedings through video-conference. Barely a few minutes into the conference, the usual glitches struck. Blips ate up tall claims by the ministers about how they were promoting infotech in their states. The screen blanked out a couple of times. Sometimes, the sound went off; at other times, disembodied voices floated from the speakers as the picture faded out. All this even as, less than a kilometre away, the ministers boasted about their impressive it policies.

Starting with Karnataka in June, 1997, and spurred by a recommendation of the National Task Force on it and Software Development, unveiling an it policy has become the latest fad to sweep across the provincial capitals. Eighteen states have keyed in it policies, listing their priorities for the sector. Explains Uttar Pradesh Industrial Development Commissioner A.V. Singh, 55: ''This is like a roadmap. The government's approach to a sector needs to be spelt out, especially in the case of infotech-a sector with a lot of potential.''

Shorn of these niceties, it's all about the money, honey. For, infotech is where the megabucks are coming from. The Indian infotech industry's revenues have soared in the last decade-from $50 million in 1988-89 to $5.7 billion in 1999-2000. The example of Andhra Pradesh, whose tech-savvy image has pulled in the greenbacks, is prompting other states to do the same. What better way to do it than drawing up a great-sounding policy. Vinnie Mehta, 32, Director, Manufacturers' Association for Information Technology, says it all: ''These are offer documents from the states. The infotech sector has become strategically important for the states to attract foreign investment.'' Concurs Karnataka's it Secretary, Vivek Kulkarni, 42: ''An it policy is crucial as it helps provide a clear signal to investors.''

The signals are remarkably similar. E-governance gets high priority and is expected to have tremendous spin-offs for industry. Other must-items are: exemptions for infotech units from various regulations, fiscal sops, and unrestricted right-of-way for Optic Fibre Cables (OFCs) (See The Common Promises). Most states have a fairly creditable hit-rate on these items.

Industry is obviously happy. Says D.V.S. Raju, 39, Chairman and Managing Director, VisualSoft Technologies: ''These incentives matter a lot for old and new units.''

Improving Infrastructure

Not everyone likes this emphasis on sops. Rues Andhra Pradesh it Secretary J. Satyanarayana, 45: ''The problem with infotech policies is that they are seen more as infotech incentives policy.'' It's more important, he argues, to improve infrastructure and develop human resources.

That's why ofc projects figure high on state governments' agendas. Karnataka has signed up with seven companies for the project. In Andhra Pradesh, Reliance is pumping in Rs 500 crore initially. Work on West Bengal's Rs 200-crore OFC project will start in September. And Uttar Pradesh is negotiating with four communication majors for a Rs 200-crore 900-km optic fibre backbone. The state is giving the project legislative protection through an Uttar Pradesh Granting of Right of Way Act.

Manpower needs aren't being ignored either. Uttar Pradesh and andhra Pradesh have both set up Indian Institutes of Information Technology in Allahabad and Hyderabad, respectively. The one in Uttar Pradesh has been set up by the state government, while that in Andhra Pradesh is a joint venture of the state government with IBM, Oracle, Satyam, and Motorola among others. Uttar Pradesh boasts of offering Master of Computer Applications degrees in 50 institutes. ''Twenty-five of these came up after the policy was framed,'' Singh points out.

The Tangible Benefits

Point taken. But does an it policy bring tangible benefits to the states? That it does is the general consensus. In West Bengal, a second software technology park will be commissioned in December, 2000, but its 50,000 square feet of space has already been booked by big names from Silicon Valley and Europe. In Karnataka, post-policy, Kulkarni claims, the occupancy rate in the Bangalore-based International Technology Park went up from 68 per cent to 100 per cent. In June alone, around Rs 10,000 crore worth of investment proposals relating to infotech parks, software development centres, and hardware manufacturing were cleared.

This still begs the question: wouldn't all this have happened without an it policy? After all, Karnataka and Uttar Pradesh (read: NOIDA) were the top two software exporters before either of them had it policies. Maharashtra, which has an it policy since 1998, is a stark contrast. Laments Ketan Mehta, 42, Director, Mastek: ''The state does not have top-of-the-mind recall for overseas investors wanting to set up a software development centre.'' Singh concedes the point, but insists that a policy helps to focus efforts.

But, a policy alone is not enough. Says Rohit Nandan, 42, Executive Director of Uttar Pradesh's Udyog Bandhu: ''An it policy can attract industry only to a limited extent. There are other factors influencing the location of a unit.'' Take Maharashtra again. Says Suresh Raisinghani, 53, Director, Tata Infotech: ''The lack of trained manpower is the main impediment to the growth of the infotech sector in the state.'' Or take Uttar Pradesh. Says Mehta: ''It's alright to have lofty objectives in a policy, but funds will be a major constraint here.'' Counters it Secretary Pankaj Agrawala, 45: ''One per cent of the state budget is earmarked for infotech initiatives. This will ensure adequate funds.''

It's still early to judge whether or not it policies are more than just glossy brochures to catch the investors' eye. Laughs Agrawala: ''It's something to judge us by.'' Someone should take them up on that.

Additional reporting by Aparna Ramalingam, Ashish Gupta, E. Kumar Sharma, Rakhi Mazumdar, & R. Chandrasekhar

Issue Contents Write to us Subscriptions Syndication