Hardware IT's a soft spot
Dithering over the semiconductor policy has cost the country investments worth billions of dollars. A similar fate awaits IT Investment Regions unless the govt clears hurdles.
By Niranjan Bharati, TNN |
The large-scale expansion plans of IT companies across the country have prompted the government to take proactive action and strengthen the existing infrastructure for the development of the sector.
The government’s proposed programme to start Information Technology Investment Regions (ITIRs) would help the sector in following its expansion plans without any hassle. The proposed policy also recommends numerous monetary incentives.
However, the ministry of communication and information technology’s (MoC&IT) pre-occupation with the telecom affairs and sidelining of the IT sector can result in the country losing vast sums of foreign investment.
In the case of the semiconductor policy, first there was a delay in announcing the policy and then it took the government over six months to come out with specific guidelines on investment and incentives. By the time policy was ready for implementation, companies like Intel had already made their investment commitments elsewhere.
The government, however, is optimistic about the present policy which targets to meet the entire production shortfall in the hardware manufacturing sector. The country, at present, produces hardware worth $16 billion, against a consumption of over $31 billion. The demand for hardware will grow at 30% per annum as against the present growth rate of 18% and would reach $320 billion by 2015, according to a report by Frost & Sullivan.
In line with this trend, the government has made special provisions for the proposed investment regions wherein it has been decided that each region would have separate units for the IT/ITeS sector and the Electronic Hardware Manufacturing units (EHM).
The proposed ITIRs would be set up on the lines of SEZs with adequate infrastructure facilities. According to the proposal, each ITIR would have at least one or two SEZ in it.
Emphasising the need for creating additional manufacturing facilities through such proposals, Manufactured Association of Information Technology (MAIT) executive director Vinnie Mehta said: “The country, currently, has a capacity of producing only 22 million PCs for a population of over a billion which is in stark contrast of 100 million for television and surely there is a need for ramping up the things if we need to take the benefit of the IT revolution to the masses.”
However, inadequate infrastructure and dillydallying on monetary policies could work as a spoilsport for the sector.
“The government also needs to invite more players in the business of providing data centres where there are only a handful of companies.
The sector has huge employment generation potential and any dillydallying on the part of the policymakers to keep at bay the infrastructure projects for the sector would adversely affect the possibility of new job creation in the market.
On a recent trip to India, Intel CEO had reiterated his interest for large-scale investment in the country. Even Dell is in the process of finalising its India investment plans.
“I have a vision of an unbelievably large industry that can develop in India around IT hardware,” Dell CEO Michael Dell recently said. The government should ensure that it does not end up losing important investments yet again.
The government’s proposed programme to start Information Technology Investment Regions (ITIRs) would help the sector in following its expansion plans without any hassle. The proposed policy also recommends numerous monetary incentives.
However, the ministry of communication and information technology’s (MoC&IT) pre-occupation with the telecom affairs and sidelining of the IT sector can result in the country losing vast sums of foreign investment.
In the case of the semiconductor policy, first there was a delay in announcing the policy and then it took the government over six months to come out with specific guidelines on investment and incentives. By the time policy was ready for implementation, companies like Intel had already made their investment commitments elsewhere.
The government, however, is optimistic about the present policy which targets to meet the entire production shortfall in the hardware manufacturing sector. The country, at present, produces hardware worth $16 billion, against a consumption of over $31 billion. The demand for hardware will grow at 30% per annum as against the present growth rate of 18% and would reach $320 billion by 2015, according to a report by Frost & Sullivan.
In line with this trend, the government has made special provisions for the proposed investment regions wherein it has been decided that each region would have separate units for the IT/ITeS sector and the Electronic Hardware Manufacturing units (EHM).
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The proposed ITIRs would be set up on the lines of SEZs with adequate infrastructure facilities. According to the proposal, each ITIR would have at least one or two SEZ in it.
Emphasising the need for creating additional manufacturing facilities through such proposals, Manufactured Association of Information Technology (MAIT) executive director Vinnie Mehta said: “The country, currently, has a capacity of producing only 22 million PCs for a population of over a billion which is in stark contrast of 100 million for television and surely there is a need for ramping up the things if we need to take the benefit of the IT revolution to the masses.”
However, inadequate infrastructure and dillydallying on monetary policies could work as a spoilsport for the sector.
“The government also needs to invite more players in the business of providing data centres where there are only a handful of companies.
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Inviting new companies to set up data centres would boost the IT and the financial sector both, as the financial sector has always the requirement of managing enormous data,” sai?d Venkata Subramanian, CEO, Flexcel, a joint venture between i-flex and HDFC Bank. The sector has huge employment generation potential and any dillydallying on the part of the policymakers to keep at bay the infrastructure projects for the sector would adversely affect the possibility of new job creation in the market.
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The sector presently employs about 2.5 million people and the figure may cross the five-million mark by 2010. “The job creations are mainly supported by newer models of operations in the industry,” said Mr Subramanian of Flexcel.On a recent trip to India, Intel CEO had reiterated his interest for large-scale investment in the country. Even Dell is in the process of finalising its India investment plans.
“I have a vision of an unbelievably large industry that can develop in India around IT hardware,” Dell CEO Michael Dell recently said. The government should ensure that it does not end up losing important investments yet again.
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