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Investment Potential-Part I IT Sector
Punjab positioning itself as the next big IT destination in the country
Ruchika M Khanna
Tribune News Service

Chandigarh, December 4
This will perhaps be the giant leap for Punjab — from being an agrarian economy to a knowledge and IT industry-based economy.

The way in which the Punjab Government is aggressively wooing the IT sector and rolling out the red carpet for IT and knowledge-based industry, it seems, that in one sector at least, the state has been able to create a buzz and position itself as the next big IT destination.

With the likes of Infosys Technologies and Biocon showing interest in setting up shop in Punjab and the state government offering them a host of incentives, including land at subsidised rates, it seems that investment in this sector will take off much earlier than in other sectors.

The reasons for this are multifarious. It is not just restricted to the new industrial policy, which allows them 80 per cent VAT retention, concessions in stamp duty and change in land use and exemption from electricity duty. Over the past couple of years, Punjab has witnessed a spurt in technical education institutions that has helped create a talent pool of readily employable IT professionals. As Chandigarh is already developed as a significant IT hub and the IT companies located in the city have been engaging with the educational institutions and helping them redesign their courses to make them suitable to the needs of the industry, it has helped create a huge readily employable work force.

Land, the other major issue for IT companies, too has been made available through an industry friendly land allotment policy with rates much lower than any other place in the country.

Harry Singh, who owns SVS Integration in the Silicon Valley that makes software for IT giants like SAP and IBM, now proposes to bring a Rs 100 crore investment to Mohali by setting up a software development centre here.

“The reason is that the Punjab Government is pro-actively bringing in industry friendly policy after having finally realised that the state’s economy cannot be sustained on agriculture alone. Regular power supply and readily employable workforce are the biggest advantages that the state has to offer,” he said. Punjab Information Technology Minister Adesh Pratap Kairon says that the new land allotment policy cleared by the state Cabinet is aimed at making land available to the IT sector at very competitive rates -- between Rs 2.5 crore to Rs 5 crore per acre.

“For the beginners in the IT sector, we have allowed them to pay the cost of land over a span of seven years,” he said.

The state already has a Software Technology Park of India (STPI) in Mohali and has just signed the MoU to set up another STPI at Amritsar by giving a grant-in aid of Rs 5 crore.

“We believe that beginners are the real growth drivers in the IT sector. So we are focusing on bringing them to the STPIs at Mohali and Amritsar, besides looking at setting up STPIs in Jalandhar and Ludhiana,” he said.

Partap Aggarwal, who heads the Punjab chapter of NASSCOM, said that with good road and air connectivity, employable youth and assured power supply, the IT industry has managed to grow in the state.

“However, we still need to develop more incubation centres which can help the beginners in the IT sector to flourish,” he added.

Growing great guns

In 1998, when the STPI at Mohali was established, software exports from Punjab and Chandigarh were just ~7 crore. In 2012-13, the exports have touched ~2,291.8 crore, showing a growth of 20% on year-on-year basis.

Punjab is hard-selling itself as ‘the’ investment destination. In its endeavour to attract investors, the state is organising a two-day mega event — Progressive Punjab Investors Summit — on December 9-10, with focus on information technology, textiles, agro-processing, health and education. In this series beginning today, The Tribune takes a look at the investment potential of each sector, environment created and its performance in the state.