The Hindu Business Line : Kerala betting big on IT

Chennai, Sept 21 If it was the catchy phrase “God’s Own Country” associated to wooing tourists to Kerala, it is now “God’s Own e-State” to attract investment to the State’s IT sector. “After tourism, IT is the next big opportunity for the State,” said Mr N. Radhakrishnan Nair, CEO, Technopark, India’s first IT Park.

By 2015, nearly Rs 15,000 crore will be spent on IT infrastructure, including Technopark expansion and creation of Technocity, in the State to facilitate an employment of over two lakh people, he told members of Nasscom at a road show to attract potential investors to the State. Officials from Kerala are travelling across India, and will also visit the US to woo IT investment, he said.

There is a perception outside Kerala that due to labour problems the State is not ideal for IT investment. This is not true, he said. In the last 13 years of operation, not a single day was lost at Technopark due to labour problem. Outside the Technopark, there could be labour problems, a bandh or strike but not inside the campus, which houses around 150 companies employing 20,000 people.

No bandh problem

‘Technopark’ is considered an important development in Kerala. There is an understanding among all political parties and people that nothing should disturb operations inside the campus. During a bandh or a strike, the police provide protection for Technopark employees who are transported in special buses, he said. “The IT is changing the landscape of Kerala,” he said.

Mr Nair gave a number of data to prove that Kerala is emerging as ‘the best destination for IT.’

Revenue growth

Revenue from the IT sector was around Rs 5,000 crore and annually growing at around 70 per cent; employee attrition was less than 10 per cent and for some companies, it was as low as 3 per cent; operational cost was lower by 35 per cent; rental and real estate was lower by 45 per cent compared to Bangalore or Chennai and electricity charge was Rs 3.20 a unit – 70 per cent cheaper than other States.

The salary structure was also one of the lowest in the country. An engineer could be recruited at a salary of around Rs 12,000. There are around 25,000 engineers passing out every year, he said.

Hub-and-spoke development

According to Mr Nair, in the hub-and-spoke development model, large IT infrastructure will be developed in cities such as Thiruvananthapuram, Kochi and Kozhikode and small IT infrastructure will come up around these cities. Currently, IT parks are planned in cities such as Kollam, Alappuzha, Thrissur, Koranad and Kannur. Each of the parks will be developed in 40-60 acres, he said.

SEZs

The Kerala Government is planning the phase II and III of Technopark as special economic zones with the involvement of the private sector. The present Technopark will be expanded to house more 15,000 people. The second phase is under construction to house around 30,000 employees and the master plan for the third phase is ready to accommodate about 45,000 people. The Government will provide the basic infrastructure like power and water, and the private sector will do the rest, he said.

The Government will form special purpose vehicles (SPVs) with private developers. The Government has the right to keep up to 26 per cent share in the SPVs, he said.

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