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November 20, 1997


The Third Wave

Tamil Nadu's brand new IT policy joins those of Karnataka
and Andhra Pradesh in wooing high-profile infotech projects.

The information technology industry of Tamil Nadu is thrilled with the state's maiden IT policy. "Focussed", "bold" and "positive" pepper their praises.

Certain initiatives have come in for special appreciation. These include according 'industry status' to software units; putting on par government and private IT ventures; the setting up of Tanitec, the IT institute; mooting a
The Third Wave
Asia Gateway
Agents for Hi-Tec City
NIIT arms Singapore
venture capital corpus for IT industries and the 50 per cent 'floor space index' relaxation for IT projects.

The industry now has only one grouse - the poor focus on hardware. Gopal Srinivasan, managing director, TVS Electronics, and former president of the Manufacturers' Association of Information Technology, agrees that the industry is seeing considerable market-driven growth. However, he feels the policy could have dwelt more on hardware as Madras and Pondicherry alone account for over 50 per cent of the country's hardware exports.

Industries Secretary M Srinivasan has a contrary view. While announcing the policy, he had argued that the strength of the state lie in software and hence the bias in the policy. He assured that software growth would drive hardware growth.

"The best-kept secret of Madras is its enormous potential for software export. The government is certainly focussing in the right direction by offering to provide better connectivity and facilitating better infrastructure,'' said TCS Executive Vice-President S Mahalingam.

He claimed that the industry does not need much assistance from the government except in vital areas like connectivity. The state's initiative to work with the Videsh Sanchar Nigam Limited, the Department of Electronics and the Department of Telecommunications, rather than work in isolation will make the industry's growth "less painful''.

VSNL already has two earth stations for the state and one more is expected to come up shortly on the outskirts of Madras. The DoE too is setting up an earth station in the state. The two new earth stations would gross an investment of Rs 700 million.

Srinivasan said, if implemented well, the state's proposal for setting up a T-Net would be a breakthrough, not just for the government but for every industry. The T-Net is an information backbone connecting all district headquarters in the state, using the cable TV network whose penetration in the state is four times that of telephone lines.

He welcomed the initiative to make the internal container depot take care of exports of specified products, including electronics and hardware, through the Madras port.

The state will also set up an air freight city near the Madras airport for improving cargo movements and to facilitate a 72-hour cycle for import of components and export of finished products by the hardware units.

Mahalingam said the venture capital corpus being planned in association with the private sector would help establish an aspect of business in which the country itself is lacking - product development.

Srinivasan has said that the corpus will be constituted in a month.

The state's IT policy will now compete with those of Karnataka and Andhra Pradesh in wooing the maximum share of multinational investment in the country.

- Compiled from the Indian media

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