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Centre works on model for tech towns

With BPO firms preferring small cities, Govt prepares plan to set up townships, reports Hemendra Singh Bartwal.

india Updated: Sep 28, 2006 02:23 IST

With the fast-growing IT and BPO industries showing a preference for small cities over metros, the Centre is preparing a model plan for the states to set up integrated modern townships for this sector with minimum delay and red tape involved.

Following consultations, top officials of the Urban Development Ministry and representatives of the two industries and state governments have arrived at a broad consensus on a model where the states only play the role of facilitator while allowing private entrepreneurs to build the townships with their own funds and suiting their specific requirements.

Called the ‘Gujarat model’, the plan is to let the government provide the land and the basic infrastructure — like adequate power supply, water, sewerage, good road network and transport facilities — while leaving the construction of the actual IT parks and townships to private enterprise with minimum interference from official agencies.

However, the official agencies have to ensure that environmental and development regulations are adhered to. The model has been highly successful in Gujarat.

According to a study conducted jointly by the National Association of Software and Service Companies (NASSCOM) and McKinsey consultants, IT and BPO industries are slowly moving beyond the five metros to Tier II and III cities due to improving infrastructure, lower rentals and labour costs and incentives from state governments keen on ensuring the growth of the knowledge sector because of its employment potential.

The study report estimates that these smaller cities will account for 40 per cent of the additional employment created in the IT-BPO sector in the next five years.

“The office space requirement of the IT industry over the next three years is estimated to be around 100 million square feet. Every private entrepreneur is ready to invest money. What is required is land and other basic infrastructure,” says NASSCOM president Kiran Karnik.

Karnik recently attended a meeting where Urban Development Secretary Anil Baijal, Information Technology Secretary Jainder Singh and other top officials from the ministries discussed the issue of setting up integrated townships with representatives of the IT sector and state governments.

Taking note of the common grievance of representatives of the IT industry — about prolonged delays and red tape in getting clearance for their projects — they decided to recommend the constitution of a high-powered committee by the state governments to act as a single window clearance facility.

Headed by the chief secretary, it would have secretaries and top officials of concerned departments and local authorities as its members.

At present, the Urban Development Ministry is drawing up guidelines that will be circulated to all the states and serve as a roadmap for the fast-track development of integrated townships, Karnik stated.

First Published: Sep 28, 2006 02:23 IST