“Bihar enjoys the advantage of being home to large number of educated youth who have the kind of skills that the modern Information Technology industry requires. The State has a good opportunity to attract IT investment by leveraging its huge young talent pool and the cost advantage,” says N K Sinha
You have often expressed the opinion that time is now ripe for IT Industry to grow rapidly in the State of Bihar. Today the IT industry is mainly concentrated in cities like Bangalore, Hyderabad, Pune, etc., what makes you think that Bihar can replicate the success of these cities?
Today, every state in India is trying to come up with policies that will lead to higher investments in the IT sector. Due to heightened global competition many IT companies are looking towards cost cutting and efficient operations. Cities like Bangalore, Hyderabad and Pune are becoming increasingly high cost operations with high attrition rate of employees. It is now quite obvious to everyone that the requirement of alternative locations for expansion and relocation of the IT industry, in next couple of years, will be quite massive. Bihar enjoys the advantage of being home to a large number of educated youth who have the kind of skills that the modern Information Technology industry requires. The State has a good opportunity to attract IT investment by leveraging its huge young talent pool and the cost advantage. The Bihar Government’s focus is to create an enabling IT Eco-System within the next two years, to take advantage of this immediate opportunity.
The Government of Bihar has formed an ‘IT Mission 2020’ for ensuring the rapid growth of IT sector in the state. Throw some light on this Mission.
First of all, let me give you the background information on the ‘IT Mission 2020’. The Government of Bihar has formed a Core Committee, which has visited Bangalore and met a large number of people ranging from top executive of IT firms, Office bearers of different IT associations and senior officials of academic institutions, to find out what steps can be taken in Bihar for developing the IT industry. A Mentor Group has also been formed to advise on the policy initiatives that the Government of Bihar can undertake for promoting IT industry. The Mentor Group emphasized that the IT industry can grow only around a conducive Eco-System and not in isolation. Therefore it is imperative to develop an IT eco-system with a holistic approach, comprising suitable Urban Development (city infrastructure), Tourism & Development of Technical Institutions. Based on the suggestions of the mentor group and information gathered from various stakeholders of the IT industries, the ‘IT Mission 2020’ has been developed to ensure sizable IT investment in Bihar in next 2 to 7 years. The ‘IT Mission 2020’ aims to set an ambitious, but realistic, target for growth of the IT sector in.
A list of parameters has been suggested in the ‘IT Mission 2020.’ What is the idea behind these parameters?
We need to monitor the pace at which we are able to develop the IT industry in Bihar. The parameters will allow us to do that. Some of the important parameters that we can use are related to revenue targets. We can set annual revenue targets that have to be achieved by the domestic IT industry. We have to ensure that we create world class IT Park and buildings with large amount of space every year. Jobs can be the most important parameter. We have to ensure that the domestic IT industry is generating certain amount of jobs every year. It is also important that we keep a keen eye on the social impact and the value addition that the IT industry is brining to Bihar.
“Emerging Cities Like Patna offer Excellent Advantage of Good Infrastructure and much Lower Costs”
There is today a scarcity of world class space for IT companies to set up their development centres. What steps are you taking to ensure rapid development of infrastructure in Patna?
In fact, one of the top priorities for Government of Bihar is to create ready to move in space with world class facilities and ambience at an affordable rate. This is the most important requirement for growth of IT industry. To start with the core group has advised that the government should construct at least 5 lakh sq.ft. IT park at prime location in Patna, with world class IT infrastructure.
Even if you are rapidly able to grow the much needed infrastructure, the leading IT companies may take time to enter. The IT industry is already flourishing in major cities, why should they come to a new place?
As I already said, the IT industry is now looking to cut costs due to global competition. Emerging cities like Patna offer excellent advantage of good infrastructure and much lower costs. It is also a fact that the Call centre/ BPO/KPO industries are place agnostic in the sense that, given proper ready to move in space, stable power and bandwidth, they are self sufficient and do not need other supporting IT industry. Therefore they can easily migrate to any city based on cost advantage and availability of human resources. We understand that in order to set the environment for growth of higher end IT industry, like Software Development or ESDM, it is important to offer ready to move in space with basic facilities absolutely free for say three years. By offering free space we will be able to get first few call centres/BPOs/KPOs on the condition that they would start operation in Bihar within 6 months of agreement with minimum 80 percent employees from Bihar, and out of these 80 percent employees, 30 percent have to be women. Such a policy will encourage the IT industry to come to Bihar and set the basic environment for Patna as an emerging IT destination.
There has also been a talk of the Government of Bihar setting up an Incubation centre for enabling the local entrepreneurs to start flourishing. Please tell us about it.
Yes, we are planning to have an IT incubation centre of 100 seats. This incubation centre will have the modern facilities that a new IT entrepreneur will require and will be given to start-up entrepreneurs at very nominal charge of about `5000 per seat. The management of this incubation centre can be vested with STPI or an Engineering college. This will encourage young entrepreneurs to start their work in Patna, thus leading to the development of a healthy base of small/ medium IT enterprises. Bihar Government could bear the capital and operational cost on the IT incubation center. Some IT industry expert must be attached to the IT incubation center to work as mentor for young entrepreneurs. It will help in developing Bihar own entrepreneurial strength and send positive message to IT industry. Also, in order to develop local entrepreneurs and the IT business in Bihar, preferential market access of government business could be made available to local entrepreneurs as a matter of policy. There is also a proposal for setting up an autonomous ‘Angel Fund’ through a SPV to encourage local young IT entrepreneurs.