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August 6, 1997


The Single Window

Karnataka's got a view to doing IT right

The single-window agency set up by the Karnataka government to clear all new industrial projects is working overtime, especially in the information technology sector where the state is determined to keep its lead and expand its role.

The main hitch to most proposals remains infrastructure, which is beyond the control of the ministry of industries.

Though projects worth Rs 16.02 billion have been cleared in 1996-97, Bangalore is yet to have an international airport. Proper roads are a far cry, with even the Bangalore- Mysore highway in poor shape.

The Mangalore port is yet to become the major entry point for the state. And the most crippling problem remains power shortage.

But Principal Industries Secretary N Viswanathan is unfazed. A senior IAS officer, he is the chairman of the Single Window Committee and is pressing ahead with big schemes to retain and strengthen Karnataka's position as India's Silicon Valley and to industrialise on a broad front.

Eleven projects (other than MNCs), worth Rs 10.94 billion, were cleared in 1994-95, and during 1996-97, the figure was Rs 16.02 billion, with an employment potential for 2,456 persons. These industries would require 59,996 KVA of power, which is a staggering figure for the state.

Viswanathan and his officers are therefore placing their bet on information technology projects which are neither capital-intensive nor power-hungry. Viswanathan said that during 1996-97, eight software projects with an investment of Rs 3.38 billion were sanctioned by the single-window agency. They are expected to generate 2,817 jobs.

Karnataka continues to be a leading software developing state, having a 29 per cent share of the software exports.

During 1995-96, the turnover of the Indian software industry was Rs 41.9 billion, a 61 per cent growth over the previous year, according to B P Kolar, executive director, Karnataka Udyog Mitra, a government body set up to encourage investors.

Kolar said Karnataka exported a record Rs 12 billion of software during 1996-97, a jump of 50 per cent over the previous year. "An increase of 50 per cent is expected almost every year,'' said Kolar, adding that his department had pitched the target for next year at Rs 20 billion.

The all-India estimate is that the total turnover of the industry, including domestic sales, would be Rs 200 billion by the turn of the century.

The domestic industry at present employs 340,000 professionals in 700 companies of which over 30,000 are employed in 130 companies in Karnataka alone, Kolar said.

Viswanathan said that last year there was a major global shift to outsourcing of software. Several Fortune 500 companies sourced their software needs from India, mainly from Bangalore. "Indian companies enjoy a good image abroad and according to a survey by the World Bank, India is ranked the number one choice for software and professional services compared to Ireland, Singapore, the Philippines, Israel, Mexico, China and Hungary," Viswanathan said.

Nearly 41 software companies in India have obtained the ISO 9000 certification and more are in the process of getting it. The sobering fact, however, is that despite these impressive figures and growth rates, India's share in the global IT industry is just 0.2 per cent per year.

According to analysts, India should have a growth rate 10 times higher than now to reach US export targets.

Europe is now considered a new thrust area, according to Kolar. The European Union has two major initiatives for India: Nasscom India-Europe Software Alliance, and expansion of the activities of the Software Support Services and Education Centre or the 3SE. The 3SE is a joint venture between India and Europe, Viswanathan said. It is designed to provide assistance in sourcing software from India and identifying suitable Indian partners for export-oriented companies or joint ventures.

Karnataka also has ambitious plans to set up a centre for education exclusively for IT where professionals at all levels will be trained. While the State has a large number of educational institutions to support this sector, they lack coordination and target-oriented training.

It is the encouragement of the Software Technology Parks of India scheme that has accelerated the growth in Karnataka, though it is only in Bangalore that it has really taken off. The one in Mysore is yet to make a mark. Another is planned at Dharwad.

The STP in Bangalore is the leading one in India with 145 units. It offers a single-point contact services for all government regulatory functions. Apart from this, several major companies have their own STPs, and they have a higher speed of data communication than the Indian standard of 64 kbps, Kolar said.

- Compiled from the Indian media

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