Slowdown hits Orissa IT units; orders dry up
Information technology units in Orissa are in dire straits. Most are staring at closure as the global economic downturn hits home. The Confederation of Information Technology Enterprises (CITE), the organised platform of small and medium IT companies in Orissa, is thus trying to see if a strategy for the industry’s survival can be chalked out.
Almost 98 per cent of the 139-odd registered IT companies in the state belong to the small and medium industries ( ITSMEs). The Orissa government is trying to tackle the situation through the adoption of more pro-active IT policies. The new state Information Communication Technology (ICT) policy is yet to be stated and adopted and models fixed for ITSMEs with the acceptance of the Bhubaneswar Development Authority’s plans on their proposed floor area ratios (FARs).
Says a senior CITE member: “We are trying to keep our members coagulated but the onslaught of the global meltdown has touched us hard. Currently, it is difficult for us to remain together and operate with fears of close down unless the state government adopts some pro-active policy”.
A number of BPOs in Orissa are surviving with extreme difficulty as there are virtually no orders from the Banking, Financial Services and Insurance (BFSI) sector. Government apathy for the IT sector over the last few months has also resulted in the ITSMEs losing interest in carrying on with their companies.
SN Patro, IT minister, Orissa, says: “ I am yet to receive a definite complaint from the ITSMEs regarding their plight because of the global meltdown, though I am aware some are not getting clients according to requirements. The state government is confident of solving the problem on a case-to-case basis.” The government, however, has issued showcause notices to 35 ITSMEs for not utilising allotted land.
The state has carved out 1,074 acres for setting up 3 Infocities around the Temple City of Bhubaneswar over the next few years with software export targets of around $1 billion by the end of the Eleventh Plan . While Infocity I already houses big facilities like Infosys, TCS and Satyam, Infocity II and III are expected to provide space to IBM and Wipro.
There are plans to set up 5 ITSEZs in the state. Other than requesting for building infrastructure and land, ITSMEs have also been demanding the creation of a venture fund by the government. They have also asked for a 10 per cent price preference, subsidy on rent, allocation of 3-5 per cent of the state budget for IT projects, marketing subsidy replacing financial subsidy, formulating an IT road map, market development assistance and open source initiative over a subsidy for using licensed software.
The segment also wants the government to arrange for immediate higher FARs of around 2.5 replacing the present 0.75, development of social infrastructure like roads, street lights, hotels, shopping malls, mass transport and security around the Infocities, reviving rent subsidy in the original form for 3 years and providing land at concessional rates.