Financial Daily from THE HINDU group of publications
Sunday, Apr 30, 2006
Financial Daily from THE HINDU group of publications Sunday, Apr 30, 2006 |
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Industry & Economy
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Real Estate & Construction States - Tamil Nadu IT boom in Chennai C.H. Gopinatha Rao
TIDEL PARK in Chennai. Picture by N. Sridharan
A fast-growing segment of Indian industry is information technology. In addition to Tidel parks promoted by the Government, a large number of private buildings has come up in various parts of the city and many are also under construction. The availability of educated manpower, high standard of educational institutions, sound infrastructure, low costs of operation, disciplined labour force, presence of international airport and major sea port are some of the factors which have made Chennai the destination for IT industry. With IT penetrating all spheres such as Government departments, educational institutions, banking, shopping, consumer applications, the potential for further growth of IT industry is enormous. Earlier, the hardware industry in India had mainly catered to the needs of domestic consumers with only marginal exports while 60 per cent of the software revenues were from exports. After the liberalisation process in 1991, followed by reduction of import duties in 1996 Multinational companies were able to export large volumes to India boosting the domestic market for both hardware and software. The decision of the Government to encourage private engineering colleges in 1984 has helped many students to become engineers who are being absorbed in IT industry.
Exclusive IT policy
The Tamil Nadu Government focused the attention of IT industry for the economic growth, formulated and adopted an exclusive IT policy way back in 1997. The main objectives of the policy indicated are to encourage the growth of hardware and software industries and associated services in the State and to remove the bottlenecks in starting and running of such units, to increase both domestic and export earnings, upgrade and develop manpower skills required for the industry, to accelerate the use of IT in educational institutions and upgrade the quality of life of the citizens by facilitating access to consumer applications of IT. The Government will also encourage the use of IT in all its departments with a view to improving productivity and efficiency. The fiscal and tax concessions available for mega projects (investment above Rs 50 crore) and super mega projects (investments exceeding Rs 1,500 crore) will be applicable to IT industries. The State Government will set up IT parks in different cities, including Chennai through ELCOT in association with private sector and will be provide full fledged facilities with adequate modules for software developments as well as sites for non-polluting hardware units, commercial and residential areas, educational institutions convention and business centres as well as connectivity required for communication and information exchange globally. Private IT park developers will be given assistance in obtaining necessary cable and satellite links through VSNL/DOT for the necessary connectivity. An IT park will be treated as an industry and be eligible for backward area capital subsidy and ST benefits. They are eligible for similar concessions granted by the Government to Government industrial estates subject to conformity to certain conditions, units in private IT parks will be entitled from stamp duty and registration charges at the time of allotment of sites/built up space, granted exemption of tax for works contract.
engaged in software development /training all software industries including services and training institutions will be entitled to industry status and shall be eligible for all concessions and incentives applicable to industries. The Government will provide continuous power supply at industry rates to all IT units and ensure quality of power as required by the industry and the tariff for power will be not as for commercial consumers but as for industrial consumers. The Government will also encourage setting up of venture capital fund for development of IT industry through TIDCO in association with private sector partners. Industries need not wait for approval of the plans before beginning the constructions provided they comply with some conditions as per a Government order. As IT building has now the status of the industry, the builder of the IT building can avail this facility. The author is former National President, Institution of Valuers, Chennai.
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