News: Go to Tier II cities for expansion, Maran tells IT cos

(BL 08/02/2007) Mumbai - The Union Communications and IT Minister, Dayanidhi Maran, has asked IT and BPO companies to consider Tier II cities seriously while expanding operations, notwithstanding the pessimism that they may harbour about the pace of improvement in infrastructure in major cities.

Speaking at the inaugural session of the Nasscom Leadership Summit 2007 here, Maran said the Centre was seriously considering the idea of developing integrated modern townships for sunrise industries such as IT and BPO.

The creation of such integrated townships will not only take the pressure off the large cities that are unable to cope with growing infrastructure demands for supporting developmental needs, it will also help in decentralising economic activities and spur the evolution of these cities, Maran said.

Infrastructure in terms of better and more airports, particularly in the Tier II and III locations and special modern integrated townships need to become part of the country's future roadmap, he said.

Already such hubs are being envisioned by the country's policy makers and a recent set of recommendations from the Prime Minister's Office suggests that such modern townships are an imperative.

Tech-driven law

The Government is also taking a fresh look at the Information Technology Act 2000. The Information Technology Amendment Bill was introduced in Parliament on December 15, 2006 and has been referred to the Parliamentary Standing Committee, the Minister said.

Further, Maran felt that the time was ripe for the IT-BPO industry to up the ante. "There may be a need for us to revisit our export and domestic market goals and create a case for higher global market share,'' he added.

Tax sops

Maran reiterated that he was in favour of continuation of tax incentives under the Software Technology Parks of India (STPI) scheme, which is set to expire in 2009. Supporting the industry's demand, he urged the industry to stand united on the issue.

While assuring the Minister that the industry was united on this issue, the Nasscom President, Kiran Karnik, also stressed on the need for the extension of STPI scheme, which benefits the small and medium sized firms.

Highlighting the software success story, he added that the IToutsourcing industry has grown by 10 times in the past 10 years.

About 1,500 delegates from some 20 different countries are participating in the three-day event, which intends to deliberate on the issues and challenges facing the industry.

The Nasscom Chairman, Ramalinga Raju, emphasised that there was need for greater innovation in the products space. He also added that the industry was committed to make the global delivery model more efficient.