GTech calls for strategy to drive IT benefits to small cities

Vinson Kurian Thiruvananthapuram | Updated on March 12, 2018 Published on June 05, 2014

VK Mathews, GTech Chairman.

Anoop P Ambika, Secretary, GTech.

Group of Technology Companies (GTech), an industry body of IT/ITeS companies in Kerala, has called for a strategy to drive the benefits of industry into smaller cities and towns of India.

More than 90 per cent of the IT exports of $86 billion for 2013-14 came from companies located in seven Indian cities.

As a result, the 50-plus tier 2 and tier 3 cities are not enjoying the full benefits provided by the industry in terms of employment, living standards and all-round development.

It is estimated that every direct employment in the IT industry generates four indirect job opportunities to the local population.

VK Mathews, recently elected as the Chairman of GTech for a third consecutive term, said that spread of the industry in smaller cities and towns is essential to decongest the big cities, provide rural employment and promote an inclusive growth.

“One policy change required is restoration of export benefits through the Software Technology Parks of India scheme at least for those companies in tier 2 and tier 3 cities.

“Thousands of small IT units, especially those in the MSME sector, will have funds to reinvest and grow, thereby creating additional employment.

“Also, large companies will be motivated to develop their base in smaller cities. We will soon bring this to the notice of the Centre,” Mathews added.

Export benefit schemes

Export benefit schemes for the IT industry were discontinued in March 2011.

While large companies have outgrown the need to be supported through tax benefits, there are thousands of small IT companies which need funds for reinvestment and increasing headcount.

It is also pointed out that by restoring the export benefits for companies in smaller cities and towns, the revenue loss to the Government is minimal, since 90 per cent of the taxable income today is generated in big cities.

Thrust on entrepreneurship

Anoop P Ambika, Secretary, said that GTech is happy to see the thrust on entrepreneurship by the current government.

It is also the responsibility of the industry to create and nurture entrepreneurs who would sustain in the longer term, standing the test of enterprise and time.

With this in mind, GTech is currently exploring a fast track alternate model which will evaluate and incubate potential ideas in an extremely time critical fashion with very close supervision from industry leaders, Ambika said.

GTech has also sought government's help to set up an e-governance lab as part of this initiative, which will trigger innovations that will directly touch the day-to-day lives of the citizens of Kerala.

Once piloted here, these solutions could be applied across the country. “We are hopeful that the governments, both at the state and centre, will support this initiative,” he added.

“Also, 80 per cent of IT companies in Kerala belong to the SME sector, employing anywhere between 20 to 200 professionals.

“Collectively, they employ in excess of 25,000 people. Most of them struggle as they attempt to scale up to the next level. We need to devise policies and schemes to support them.”

Other office-bearers of newly constituted GTech are Alexander Varghese, Chief Administrative Officer, UST Global; Joseph Korah, Centre Head, Cognizant - Kochi (Vice-Chairman); Binu Jacob, CEO and Managing Director, Experion Technologies; Mukund Krishna, Managing Director, Suyati Technologies (Joint Secretaries); and Bysakh Bhasi, Director, D+H India (Treasurer).

Published on June 05, 2014
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