STPI should drive electronics sector, says BV Naidu

Though the Finance Minister, Mr Pranab Mukherjee, had in his Budget speech for 2011-12 refused to consider the request of the Indian IT industry to extend tax sops for the STPI (Software Technology Parks of India), they could still be relevant for SMEs and the electronics industry.

Soft cushion

Speaking to Business Line, Mr B.V. Naidu, Chairman and CEO of Sagitaur Ventures India Pvt Ltd and the erstwhile Director of STPI (Bangalore and Hyderabad), said that tax benefits apart, STPIs were “a soft cushion between the hard bureaucracy and the industry.”

“STPI even today is the single largest sector-specific organisation in India and there is nothing like the STPI today in other sectors such as agriculture or manufacturing,” he pointed out. One area where he said STPIs could play a pivotal role was in addressing the disparateness between the large and the small companies. “The larger IT companies are growing at the cost of the smaller ones.” He said that STPIs could try and address this imbalance.

Mr Naidu also pointed out that STPIs should address the growing electronics demand of the country. “In 2009, electronics was $45 billion market in India, out of which 85 per cent was imported. By 2020, this will be a $400 billion industry, and if we still insist on importing, we will be importing goods worth $320 billion, which is greater than what we spend on oil.”

He said that after two decades of focus on IT, STPI should have one decade of electronics and the STPI would be instrumental in making India's electronics-related plans come true. “For this, first, the STPI will have to forget that it was setup for exports,” he declared.

Semiconductor industry

“It is not enough to have a beautiful scheme because schemes don't necessarily come true. We also need an implementation mechanism.” Mr Naidu, who is a member of the peer review committee of the Department of Information Technology, said the Government needed to do a lot to promote the semiconductor industry in India, like setup an electronic development fund, provide special incentives, and give preferential access to the local industry in government procurement.

“All this will happen in 2011-12,” he stated. Of the 20 STPIs spread across the country, Karnataka, Maharashtra, Andhra Pradesh and Tamil Nadu are the biggest ones.