Humps on IT road: talent, infrastructure crunch | india | Hindustan Times
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Humps on IT road: talent, infrastructure crunch

Even before unveiling the information technology (IT) policy, the state government has been claiming that its policy is different and markedly superior to the IT policies being implemented by other state governments. Does the reality square with the claims?

india Updated: Mar 25, 2006 13:36 IST

Even before unveiling the information technology (IT) policy, the state government has been claiming that its policy is different and markedly superior to the IT policies being implemented by other state governments. Does the reality square with the claims?

Clearly the USP of the policy lies in its emphasis on job creation. Many of the concessions promised to prospective IT investors in the state have a proviso attached – incentives have been linked to the jobs created in each unit.

 Development of basic infrastructure like roads and power is a sine qua non for attracting IT players. In the absence of a robust infrastructure, it is doubtful whether the state can leapfrog into a knowledge-based economy

For example, a firm can avail itself of a rebate of Rs 25000 in acquiring land for every job created by it; moreover, companies providing employment to more than 500 people will be provided further concessions on the purchase of land.

The policy also stipulates that land shall be allotted on 33 years lease with provision for renewal provided such land is used to provide at least 350 jobs per acre in IT and ancillary operations. It also lays down that companies providing employment to more than 250 people in the state will get preference of 10 percent marks in the prequalification stage of the bidding process of IT procurement.

However, the moot question is does the state have competent and trained personnel to plug in the required vacancies? Given the lack of an English medium education and absence of a strong stream of science and mathematics at school and college level, the answer is an emphatic no.

Though the policy proposes to provide modern computer hardware, software and internet connectivity in 500 selected government schools and also seeks to establish centres of IT excellence in all government engineering colleges, it seems unlikely that these measures would suffice to generate the requisite quantum and quality of trained IT personnel for new ventures.

The policy also seeks to use IT as a tool to generate wealth in the state. The government has offered both fiscal and non-fiscal incentives to attract IT investors to the state. For instance, IT industries have been exempted from payment of stamp duties, registration fees, electricity duty tax, entry tax and work contract tax.

The policy also exempts IT units from the provisions of Factories Act, Maternity Act, Contract Labour Act, Payment of Wages Act and the ESI Act. The policy also aims at promoting Bhopal, Indore, Gwalior and Jabalpur as IT investment centers.

However, it must be understood that the development of basic infrastructure like roads and power is a sine qua non for attracting IT players. In the absence of a robust infrastructure, it is doubtful whether the state can leapfrog into a knowledge-based economy.

Moreover, unlike Hyderabad, Bangalore and Chennai, the 4 major cities of the state lack adequate air connectivity, proper public transport, requisite housing and sound environmental planning; consequently the attempt to promote the 4 major cities as IT investment hubs may turn out to be a non-starter.

A major drawback of the policy is that it fails to deploy IT for rural uplift. IT should be leveraged to benefit the farm sector and for alleviating incomes and the information deficit of the rural masses in the state. Unfortunately, the policy lays down no concrete initiatives in this regard.

Finally, for any policy to be successful adequate financial provision is a must. Of the total state plan expenditure made in the 2006-07 budget, a miniscule 0.17 percent has been allocated for the IT sector!
With such appalling financial outlays, the ability of the state government to promote and sustain IT sector development in the state seems suspect.

Assistant Professor, National Law Institute University, Bhopal