Orissa IT units demand exclusive venture fund

Information Technology (IT) units in Orissa have requested the state government to create a venture fund with a corpus of Rs 50 crore.

“IT SMEs in the state have been hit hard by the recession as orders from their clients have almost dried up in the past three months. The state government needs to create an exclusive venture fund for IT SMEs with a minimum corpus of Rs 50 crore,” said an official of the Confederation of Information Technology Enterprises (CITE), Orissa.

Apart from the exclusive venture fund, the official pointed out that the Orissa IT department needs to formulate a new ICT (Information and Communications technology) policy to cater to the needs of the existing SMEs in the IT sector as well as the upcoming entrepreneurs.

The official added the new ICT policy should be modeled on the best IT practices of neighbouring states like Andhra Pradesh and West Bengal. Apart from facilitating hassle-free land acquisition to the local IT units at confessional areas, the policy should also ensure that the units get interest subsidy on loans and also VAT (value added tax) waiver on capital equipment, the official added.

“The state IT department also needs to ensure that in the implementation of the various e-governance projects, the contractors who are awarded the projects should forge tie-ups with the local units. This move would benefit the IT SMEs as well as ensure qualitative service for the end-users,” the official said.

He added the recent building norms of the Bhubaneswar Development Authority (BDA) have been a dampener to the local IT units. “Even though the BDA has revised FAR (floor area ratio) to 2.75 for IT units, it has stated that the units would have to earmark 60 per cent of the space for parking. This means additional costs for the IT units and SMEs will suffer”, he pointed out.

Hemant Sharma, director, industries department, Orissa government, said: “Most IT units in Orissa are SMEs and there is lack of adequate infrastructure for these units in the state. State government agencies like Orissa Computer Application Centre and the Orissa Industrial Infrastructure Development Corporation should provide plug-and-play office space to these units at subsidised rates.”

On the issue of exemption of VAT on capital expenditure for the local IT units, he said these units can take up the issue with the state VAT advisory council for redressal.