New Industrial Policy: UT eyes Industrial Area as next IT hub but Rajiv Gandhi IT park yet to tap full potential

Tech Mahindra’s pending case of additional allotment of 5 acres of land in phase 2 is an example of sluggish response of the local administration towards the IT industry.

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The land in question is next to the company’s current premises that came up on 10 acres of land, which was initially allotted in 2006.

As per Chandigarh Technology Park (CTP) rules, 2006, the company operating in IT park could apply for additional land within five years of their existing allotment.

Tech Mahindra made a request for additional 5 acres to expand its business in early 2007 for the purpose of pushing its exports and creating additional 1,000 jobs.

Despite the fact that the then UT administrator approved the allotment of the land, the company has still not got the final allotment letter for the last eight years now.

Sources said that the matter got stuck initially because the Estate Office was not clear about allotment rules in the SEZ area. But later, CTP rules were amended and specific provision was added to guide them as to how to move with regard to allotment of land in SEZ.

But over the years, files kept moving between the finance department and estate office. The final allotment, however, did not happen, hurting the company’s expansion plans.

It is learnt that the administration could not finalise the reserve price for the allotment. Besides, it also failed to take a policy decision whether to allot the vacant land by cutting it into small plots since the land was initially reserved for bigger plots.

Tech Mahindra was not the only company affected by administrative issues.

Devendra Bhaugana, Assistant Development Commissioner, SEZ, said that four more companies including Silicon Valley Systech Inc, 22nd Century Technologies Inc were recommended to the administration for allotment of land in IT park, which is still pending.

“I can’t say why allotment was pending so far but it is unfortunate that IT park could not tap its full potential,” he said.

Meanwhile, the administration’s overall planning to promote IT in the city did not bear fruit.

It had to give away 270 acres of land meant for phase 3 after the Supreme Court in 2012 declared its 2004 acquisition ‘illegal’.

A senior executive of a local IT company asserted that the land acquisition controversy turned away many IT companies interested in setting up business here.

On the contrary, existing units also did not perform well in terms of employment generation and export revenue that was the key objectives of the SEZ.

The CAG report of 2013-14 pointed out a shortfall of 66% in employment generation in existing units operating from IT park. Their actual foreign exchange earning was recorded at Rs 2,100 crore against the projected figure of Rs 4,700 crore.

Amarbir Singh, chairman of CII’s Chandigarh council, told Newsline that despite all the concerns, the city has great potential for IT industry. The non-allotment of plots in IT park is a vital concern and recently CII has asked the administration to cut the vacant land into small plots and allot it accordingly.

“We are hopeful that new administration is moving in the right direction. The new industrial policy also talked about allotment of plots both in IT park and Industrial Area for the new entrepreneurs,” he said.

Sameer Jain, a local IT entrepreneur, said that with the new administration, there seemed to be a new thought process but their action must precede their promises now.

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