New STPI centres in Punjab will benefit small IT firms

Small and medium enterprises (SMEs) in Punjab's IT sector are likely to get a shot in the arm with the planned setting up of two Software Technology Parks of India (STPI) centres as well as state-of-the-art incubation facilities at Mohali and Amritsar. In addition, the new industrial policy which offers incentives to IT SMEs is expected to play a pivotal role in promoting this sector.

The incubation facilities in the STPI centres will provide entrepreneurs with facilities such as ready to use plug-and-play facilities - including a data centre and a network operations centre - and a readymade business environment. The two centres are expected to be ready in the next two years.

According to entrepreneurs, the new STPI centres will go a long way in encouraging new IT/ITES entrepreneurs to set up shop and start operations in the region.

Adaish Partap Singh Kairon, Punjab's minister of food, civil supplies and consumer affairs, food processing and information technology, told Business Standard, "For IT sector growth in the region the ecosystem has to have new IT start-up units as well as big IT companies. Due to the high cost of land, small new IT units are not able to start operations. So these incubation facilities will go a long way in promoting entrepreneurship in the region."

In order to give a fillip to the IT sector, the minister said, the number of smaller plots has been increased, while the minimum investment for availing of incentives has been reduced to Rs 1 crore under the new industrial policy. The new policy has provisions like 80 per cent exemptions from VAT and CST, exemption from payment of electricity duty and stamp duty and single window clearance of approvals for IT companies.

The state government has allotted 2.72 acres of land for the Amritsar STPI centre, and also agreed to provide a grant-in-aid of Rs 5 crore. The design of the building has been finalised and work is to start soon. Initially, the total built-up space will be 40,000 sq ft. The STPI centre and incubation centre at Mohali will have about 140,000 sq ft of built-up space and will be built at an estimated cost of Rs 56 crore. Land has been allotted by the state government for this purpose.

Omkar Rai, director general, STPI said, "The STPI incubation facilities will have STPI office premises, a network operation centre, a finishing school, plug-n-play facility incubation and raw incubation space."

The first STPI centre in Punjab was established in 1998 at Mohali, when IT activities were at a nascent stage and exports from the region were just around Rs 7 crore. In 2012-13 the state's IT/ITES exports touched Rs 2,200 crore - a milestone for any Tier-II city - and created jobs for 35,000 professionals.

The export data suggests that Mohali has emerged as the top Tier-II city in northern India and one of the leading Tier-II cities on an all-India basis. The tri-city region (comprising Chandigarh, Panchkula and Mohali) has around 170 IT/ITES units, predominantly in the SME sector.

In order to give a further boost to the IT sector in Punjab, the state government has requested the Union government to set up two more STPI centres, at Jalandhar and Ludhiana.