The Tamil Nadu Chief Minister, Ms J. Jayalalithaa, at the recent Connect 2011, the information, communication and technology event of the State, announced that the State proposes to bring out a new information technology and IT-enabled Service Policy that will engender many avant-garde features.

The policy will catapult Tamil Nadu to the numero uno position, said the Chief Minister.

Mr S. Ramadorai, Vice-Chairman of Tata Consultancy Services, at the event said the State is establishing a leadership in the IT sector. “While I am happy with the progress being made, I believe we now need to innovate to create IPR, to create new products and move our attention to hardware manufacture, an area where we are very late comers.

While the industry's list of suggestions to be included in the policy is huge, the focus has been to be give importance to infrastructure improvement, tax exemptions to units in the Special Economic Zone, increase in e-governance projects and develop tier-II and III towns.

Incidentally, the SEZ policy is expiring in 2014.

“While we have world-class buildings housing the IT companies, access to those buildings is pathetic,” said an official of a large software company who is not authorised to speak to the media. “The policy should give major thrust to developing infrastructure. It is very embarrassing when we had to take clients in such poor roads,” he said.

SEZ-notified land banks

Mr. R Chandrasekaran, President and Managing Director, Global Delivery, Cognizant Technology Solutions, which has a large presence in the State, sought support in making available SEZ-notified land banks. If the land banks similar to that of Siruseri are made available expeditiously, companies can take advantage of the policy, make investments and catalyze employment generation.

Also with the State government announcing the Old Mahabalipuram Road as the IT corridor, the supporting infrastructure/ecosystem in terms of transportation, educational institutions and healthcare needs to be scaled up to support it. Currently, the ecosystem has hardly kept pace with the growth and sophistication of the IT services firms located in this corridor.

Tamil Nadu can proudly boast of a multi-faceted growth story in ICT: software services, hardware and telecom. With systems integration playing an integral part in many of the IT deals signed, Tamil Nadu can take a lead in ensuring that the cluster for hardware manufacturing and telecom manufacturing are seamlessly integrated with software services.

Great potential

Tier-II/III cities have a great potential to accelerate inclusive growth. It is not enough to promote Tier-II/III cities; adequate incentives need to be provided to get companies to expand in those regions. Also a tiered and focused approach is needed for specific Tier-II/III cities based on their inherent strengths rather than merely replicate the Chennai model: manufacturing focus in Coimbatore, education focus in Tiruchi and multi-lingual voice-based support focus in Tirunelveli, he said

Single-window clearance

According to Mr S. Sridharan, Managing Director, TAKE Solutions, a single-window clearance for all statutory regulations are required for the IT/ITes industry. A separate labour category should be created for the IT/ ITes industry and it should come under a separate Shops and Establishments Act.

Infrastructure development is an absolute essential for the IT industry. Substantial improvement in this area needs to be done specially in the IT corridor. The Metro Rail project is in progress, which will go a long way in solving travel woes. The concern is that till this project gets completed, the commuting hassles will remain like lack of safety due to bad roads, wastage of time in travel and high transportation costs, he said.

The State Government should consider Stamp duty exemption for SEZ and VAT exemption for SEZs.

In addition, there should be absolute clarity on Service Tax and Sales Tax applicability. For example, where Sales Tax is applicable, no Service Tax should be applicable. Ambiguities in legal regulations of Sales and Service Tax are a burden to the end-customers which are subsequently affecting sales, he said.

e-governance

The Tamil Nadu Government should increase adoption of e-governance policies. The Tamil Nadu Government should support rural BPOs by giving projects to them. This would enable equitable growth. Better incentives should be given for entrepreneurs to set up business in Tier 2 and Tier 3 cities to generate employment opportunities and improve growth.

Mr Kamesh Ramamoorthy, Chief Operating Officer of Ramco Systems, saud the policy should look at listing home grown IT product/ solutions companies as preferred vendors/ partners for State Government projects. Also, tax exemption and subsidies should be given to IT companies headquartered in Tamil Nadu. Investment allowance for software product companies which will boost companies to do research and development, he said.

The policy should focus on the Government and private sector partnerships for key projects. Setting up of finishing schools in collaboration with the Industry to ensure the talent is industry ready is important, he said.

The IT industry should be adequately represented in Government panels on the industry, he said.

raja@thehindu.co.in

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