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Information and Communication Technology (ICT) Policy of Telangana
ICT draft 2016
Hyderabad, the capital of Telangana, is now recognized as one of the leading Information Technology hubs globally. It houses over 1200 IT companies, both large and small which together employ close to 4 Lakhs professionals, besides supporting an indirect employment to over 6.5 Lakhs people. In 2014-15 the total value of software and IT products exports accounted for INR 68,232 Crores and this amounts to about 11% of National IT exports. The sector is growing at a rapid pace. The YoY growth in 2014-15 was 16%, which is 3% higher than the national average growth.
Origins of IT industry in Hyderabad started in 1990, when Maitrivanam, India’s first IT incubator was established with highest standards of IT and communication infrastructure thereby propelling the growth of local IT entrepreneurs. In 1992, the IT Hub was moved to a more suitable location in Madhapur and this coupled with the access to skilled workforce ensured Hyderabad became a favorable destination for NRIs, who were setting up companies in India. With this fast growing IT e c o s y s t e m , Hydeabad attracted multiple multi – national corporations in the likes of Citi Group, Intergraph and Indian leaders such as Wipro, Cyient etc. Over the last two decades, Hyderabad has placed itself on the global IT map by not only attracting leading IT companies but also taking IT to the deeper roots of the society.
Telangana will continue to encourage all existing IT/ITES companies already located in the state to expand and grow within the state, and also motivate and incentivize new companies to come and establish their units in the State. While Hyderabad will remain the center of product development and R&D activities, companies, particularly ITES companies will also be encouraged to locate themselves in Tier 2 cities like Warangal, Karimnagar, Nizamabad etc. The following instruments will be utilized to facilitate expansion of IT and ITES industry.
Development of IT parks
IT activities are largely concentrated in Gachibowli, Madhapur and Nanakramguda to a large extent in Hyderabad. Two more clusters at Adibatla and Pocharam are at a nascent stage. As a part of the ITIR (Information Technology Investment Region) scheme, Government will identify suitable land parcels under which new IT clusters can be located. The Government will leverage the growth corridor along the Outer Ring Road (ORR) by earmarking certain zones to be used exclusively for development of Information Technology.
All the new IT parks and IT clusters will be provided with the required infrastructure of highest standards. Telangana State Industrial Infrastructure Corporation (TSIIC) will become the nodal agency to create this infrastructure and manage the land bank. ITE&C department will play a key role in existing IT parks as well, in ensuring that the existing infrastructure is well maintained at all times. A separate Critical Infrastructure Fund (CIF) will be kept at the disposal of ITE&C department to meet urgent maintenance works in existing IT Parks.
Special focus on SME’s
While large companies typically have globally recognized products/services and provide employment to thousands, the contribution of hundreds of SMEs working in the IT sector is no less significant. It is estimated that there are over 500 IT companies in the SME category who collectively employ over 70% of the working IT population. A major part of the state’s IT revenues comes from SMEs and the government aims to give a further boost to this sector by crafting two initiatives specifically for them.
Given their scale the SMEs do not have the wherewithal to develop their own campuses or buy a built-up space for their use. Most of them presently lease existing buildings to run their operations. A major support that will be given to such IT SMEs by the Government will be to offer lease rental subsidy. The Government also intends to construct IT towers in Gachibowli/Madhapur/Nanakramguda exclusively for SMEs having small office spaces which the SMEs can use as their front office for client interactions and brand building purposes. The IT towers will also have facilities like common conference centers, availability of WiFi, cafeteria and other basic facilities on par with leading commercial IT office hubs.
One of the key factors that stops SMEs to grow bigger is the ready access to capital. Realizing this, the government is trying to ease this bottleneck and give SMEs the financial assistance that will help them grow sustainably. The Government shall first engage with national and international investment banks, financial institutions and Private Equity funds to understand the synergies between existing SME scenario and the finance providers. Later, in collaboration with these bodies, the government shall carve out a specialized financial instrument that will adopt best practices from various countries to eventually help this sector thrive. The instrument shall directly promote SMEs by providing them easy access to affordable financing structures.
Coordination mechanism
The Government wants to develop a responsive mechanism which will be tuned into the critical needs and emerging requirements of IT companies. While the ITE&C department itself can resolve most such issues and grievances, certain issues will require to be coordinated with other line departments like Telangana State Industrial Infrastructure Corporation (TSIIC), Greater Hyderabad Municipal Corporation (GHMC), Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB), Hyderabad Metropolitan Development Authority (HMDA), Transmission Corporation of Telangana (TRANSCO) etc. Government will create an empowered committee comprising senior officers from these departments which will meet periodically and interact with industry bodies such as National Association of Software and Services Companies (NASSCOM), Hyderabad Software Enterprises Association (HYSEA), Telangana Information Technology Association (TITA) and other industry associations, in order to create multiple channels for soliciting feedback from the IT industry.
Electronics
The Telangana Government is planning to make Hyderabad a global hub for Electronics. The State Government attempts to provide strategic impetus to the electronic hardware and design industry and seeks to achieve this aim by providing infrastructure support, by creating a larger pool of skilled workforce, by offering a supportive policy environment, and by providing a pleasant tax and fiscal regime.
Govt. of Telangana is setting up two EMCs (Electronic Manufacturing Clusters), spread over 600 acres and 310 acres at eCity and Maheshwaram Science Park respectively. These EMCs are coming up in the 200 sq.km/50,000 acre ITIR (Information Technology Investment Region) adjacent to the 8-lane, 158 Km Outer Ring Road near Hyderabad International Airport in areas other than zones prohibited for environmental reasons. The two EMCs will be dedicated clusters for Electronics Manufacturing having the full complement.
Regulatory Framework
With the single window mechanism of giving approvals and clearances within 15 days i.e. TS-iPASS, the State hopes to create a highly favorable environment for companies to set up and expand operations.
Talent Pool
In tune with the National Program for Skill Development, the state’s skilling initiative, Telangana Academy of Skill and Knowledge (TASK), ensures companies get easy access to a rich skill-base in Telangana. With customized training programs developed through constant industry feedback complementing prestigious educational institutions that exist in the state, the state ensures that human resource needs of the companies are met. Also, to promote entrepreneurship and innovation in this sector, the State is setting up an “Electronics Incubation Center.”
Incentives
The Govt. of Telangana has come up with a wide array of subsidies and tax breaks for companies willing to start/expand operations in the state. The state is providing tailor-made incentive packages that cater to a wide array of industries that come under the Electronics sector, such as Semiconductors, VLSI design, mobile manufacturing units, PCs and other gadget manufacturing units, LED manufacturers, EMS companies etc.