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August 5, 1998


Maharashtra joins race to woo IT megabucks

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The Maharashtra government, in a bid to take on competition from neighbouring states, will release an 'investor-friendly' information technology policy on August 15.

The state government has decided to amend the Development Control Rules and the Industrial Location Policy to allow use of space for office purpose for the IT industry in South Bombay.
Losing mind
Maharashtra in IT race

Chief Minister Manohar Joshi made these announcements at a plenary session on 'The services sector: Transforming Maharashtra'. The meeting was organised by the Confederation of Indian Industry.

Joshi said that his government has already taken steps to make available appropriate built-up space for the IT industry.

The Maharashtra Industrial Development Corporation has constructed built-up space of around 500,000 square feet at the Software and Electronics Export Processing Zone with. It plans to build another 500,000 square feet on an additional five hectares of land granted to it by the state government adjacent to SEEPZ.

The City and Industrial Development Corporation has already commissioned an 'Infotechpark' at Vashi, New Bombay, with 600,000 square feet of built-up space for software professionals.

In an effort to make Maharashtra an attractive destination for software development, the state government has embarked on a plan to build a new 1 million square feet of facility at New Bombay exclusively for the software industry, he added.

State Industries Secretary Y S Bhave said that the new facility, which will be called Millennium Park, will be ready by December 1999.

The government is considering a number of suggestions, including the setting up of an Indian Institute of Information Technology at Pune, the setting up a software university for encouraging research and development in the sector, removing zoning restrictions on location of software facilities, doing away with environmental clearances for it, abolishing some taxes and coming out with innovative financing schemes for software start-ups.

BPL Telecom Business Group Chairman and Managing Director Rajeev Chandrasehkar urged the state government to play an aggressive role in driving the National Telecom Policy and help in improving the infrastructure.

Tata Consultancy Services Chief Executive S Ramadorai said computer education should start right from the school level. According to him, Maharashtra produces about 25,750 IT professionals every year compared with 26,000 in Tamil Nadu and 24,000 in Karnataka.

JM Financial & Investment Consultancy Services Chairman Nimesh Kampani said that Bombay can emerge as an important offshore financial centre over the next few years since it is situated between two of the biggest financial centres in the world - Tokyo and New York.

The city is a "perfect time zone" due to its location. "The Government of Maharashtra will have to play an important role in making this happen. A lot of changes will have to be brought about on the infrastructure and stamp duty front," Kampani said.

Kotak Mahindra Finance Vice-Chairman Uday Kotak said that the stamp duty in Maharashtra is very high as a consequence, of which the state has been losing a substantial amount of business.

Kotak also said that the quality of living in the city would have to improve for it to emerge as a successful financial centre. "A low-cost operations strategy is needed for the financial services sector in Bombay," he said.

Housing Development Finance Corporation Managing Director Deepak Satwalekar said "Over the last few years, there has been a flight of finance companies from Bombay to other centres like Hyderabad and Delhi on account of the high real estate prices."

State Sales Tax Commissioner Subodh Kumar said that the growth in information technology is essential to the growth of the financial services sector in the state and also agreed that the "cascading effect" of stamp duty should be done away with.

While ammendments to the Rent Control Act and Repealment of the Urban Land Ceiling Act have been pending, the government should also change its outlook from being a doorkeeper to playing a more proactive role in attracting capital and investment, participating industrialists observed.

News Television Chief Executive Officer Rathikant Basu said that the enforcement machinery to curb music and video piracy needs to be put in place and added that the government must open up new destinations for tourism and participate as a joint venture partner in entertainment projects by bringing in land as equity.

Evaluating the transport system, Air Freight Chairman Cyrus Guzder said Maharashtra's competitive advantage lay in developing a bulk container terminal, coastal shipping and an integrated rail, road and port system.

Maharashtra State Road Development Corporation Managing Director R C Sinha called for integration of rail, road and port infrastructure and a high-level committee of infrastructure-related departments to remove impediments.

Essar Group Director Prashant Rua said that Maharashtra has unique advantages in the general cargo areas, which must be promoted by developing a large container terminal on the mainline and then distributing over Bombay.

- Compiled from the Indian media

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