Opinion Creating a Silicon Valley at home

Aiming to beat the Valley is a lofty goal indeed,but there is a sense of deja-vu when it comes to the government’s IT policies. Previous Karnataka governments have released same-sounding manifestos with similar flourish. The last one by the BJP government was launched as recently as 2011. In a sense,successive governments simply appear like they are dusting off the standard few points,couching them in different language and brandishing them as “new”. And often,it is not a smartly spelled-out policy but the implementation that is found lacking.

There are several decent proposals in the 2013 policy,however. The government wants to focus on innovation-based startups,for instance. It wants to leverage the IT ecosystem to create e-governance projects that can renovate administration. It wants to set up a branding fund for the capital city called Bangalore First,similar to India Brand Equity Fund.

For the moment,Bangalore’s IT industry is pleased with all the noise. As per the new policy,the government will treat the IT and BPO industries on par with public utilities,categorising them an essential service exempt from strikes,bandhs and similar disruptions for a further five-year period. Companies will not be required to comply with an outmoded 1940s labour law,relieving them of the anxiety of doing business in the state. The sector will be entitled to stamp duty exemption of 75 per cent for expansion in cities outside Bangalore,such as Mysore,Mangalore and other locations. In a boost for innovation and entrepreneurship,startups will be eligible for plug-and-play space with internet connectivity at concessional rates.

The most exceptional feature of the policy is the government’s Employment-Linked Incentivisation of Land Allotment (ELILA),which allows for land allocation outside Bangalore at subsidised prices,linked directly to job creation. “The government will allot one acre of land on long-term lease at concessional rates for every one thousand new jobs with a monthly salary of Rs 10,000 or more,” said Siddaramaiah.

It is a new and welcome focus on Karnataka’s smaller cities as the government seeks to widen the foundation of the industry while balancing growth with a social agenda. The government will offer stamp duty exemptions and reduce power tariffs. How many IT enterprises will be eager to foot an annual wage bill of Rs 12 crore or more to receive a subsidised acre of land from the government will only be known a few years on.

The IT policy aims to double employment in the sector in Bangalore from the current one million jobs to two million by 2020. It wants to take IT exports from around Rs 1.65 lakh crore (accounting for 40 per cent of India’s exports) to Rs 4 lakh crore,nearly a two-and-half times jump. The jobs and productivity will make Bangalore the single largest IT cluster in the world in seven years,Srivatsa Krishna,Karnataka’s IT Secretary,said at a conference announcing the new policy. The combined numbers for neighbouring technology centres,Hyderabad and Chennai,are less than half of Bangalore’s current employment and productivity numbers,he said. IT Minister S.R. Patil said the policy would encourage smaller cities in the state to replicate Bangalore’s success and turn into “emerging IT centres”.

There is a catch,however. The cities that the government wants to promote as new IT centres are cities like Gulbarga and Belgaum,which are many,many driving hours from Bangalore. Gulbarga,for instance,is no less than a 10-hour drive from the city and road connectivity is far from satisfactory. Most of these cities are not even networked by air and lack airport infrastructure. Even neighbouring Mysore is not connected to Bangalore by air. A trip from the Bangalore airport to that city,where Infosys has a large training facility,takes no less than four hours.

Over a decade ago,several Southeast Asian economies adopted the “build and they will come” principle,to imply that if the government provides good,ready infrastructure,industry and businesses will flock to those centres. In Karnataka,the government seems to have adopted the reverse principle. “Banni,nodona” it appears to be saying,or,“Come,then we will see.”

saritha.rai@expressindia.com