Published & Updated as on - 2010-03-06

About Information Technology Investment Regions Policy of Govt of India -February 2010.

ITIR Policy Announcement by Central Govt

(Excl Ventures News) The Cabinet Committee on Economic Affairs on 3rd April 2008 gave its approval to the proposal to create Information Technology Investment Regions (ITIRs). The Policy Resolution was released on 28th May 2008. These ITIRs would be endowed with excellent infrastructure and supported through investor-friendly policies. ITIRs were conceptualized keeping in view the need to boost the growth of both IT/ITES and Electronic Hardware Manufacturing (EHM) Units.

These regions would become major magnets for investment creating employment opportunities and economic growth in the area. Simultaneously, it will reduce the pressure on existing urban centers by enabling growth of new townships and dispersal of industry.

The regions would be a combination of IT/ITES and Electronics Hardware Manufacturing Units; Public uitilities, residential area, social infrastructure and administrative services. Such regions could include new integrated townships, SEZs, industrial parks etc. In the ITIR, there would be a clear delineation between the IT/ITES areas and Electronic Hardware Manufacturing areas. The ITIRs would generate direct and indirect employment during the construction and operational phases.

Each ITIR is expected to be a specificlly notified investment region with minimum area of 40 sq.kms. planned for IT/ITES and EHM Units. The minimum processing area will be 40% of the total area of the ITIR. The ITIRs will be developed in a phased manner.

The State Government would ensure that all physical infrastructure and utilities within its jurisdiction (power, water, roads, transportation, sewerage and effluent treatment facilities) are provided. The Central Government will facilitate development of National Highways, Airport and Rail links to the ITIRs. The Public-Private Partnership (PPP) route is advocated for the development of ITIRs. State Government will select the developers/co-developers through a transparent process.

ITIRs are expected to push the country's total export of services from $31 billion in 2007 to over $60 billion by 2012 as these would address the critical issues of infrastructure shortcomings and increasing demand for office space.

Who will do what in ITIRs?

ITIR is like a Mega SEZ where Govt is expected to provide infrastruture for private developers to build their campuses and manufacturing units.

The Central Govt will fund the development of External links like Highways, Rail and other transportation infrastructure. State will develop internal public amenities. The internal infrastructure of the ITIR would be internally built and managed by a Developer or a group of Co-developers.

Companies engaged in IT/ITeS/Electronic Hardware Manufacturing will be invited to set up units in the ITIR. The State Government would lseek information on the land/space requirements of the IT companies in the ITIR togetjher with project details, investment proposed, employment potential and other related information so as to facilitate the State Government to plan the ITIR configuration.

Who all have put up proposals for ITIRs?

As of Feb 2010, Apart from Hyderabad, Chennai, Bhubaneswar, Bangalore has come up with ITIR proposals in line with GOI Policy

Will all this materialize?

The proposal of ITIR as a concept is in very early stage. Initial announcement said there would not be any special tax breaks. But industries could get infratsructure tag, enabling them to get easier bank funding. The ITIRs might include existing SEZs, industrial parks, export-oriented units or growth centres that have been duly notified by relevant central or state legislation. In such cases, however, tax benefits available to SEZs will stay.

Centre's Department of Information Technology will act as the nodal agency, a high-powered committee headed by cabinet secretary will scrutinise applications and monitor the implementation of these projects. Once the state governments forward the proposals, the Centre plans to approve in five-six months.

But from what we have seen previouly with regrad to SEZ policy and Semi Conductor Policy, it should take at least 3 years to have firm policy framework and rules in place, after which years for any physical activity to begin. So nothing much can be expected to happen soon. Look at SEZs! There was so much of hype in cooking up SEZs. Currently, instead of developing them, developers are running behind Central Govt to have them denotified.

With ITIRs, the Union Govt targets to double IT exports from US$40 Billion to around US$80 Billion in couple of years. Well........ are there companies abroad ready to pump $40 Billion worth of new orders, into India in such short time?

But in the long run, this should contribute to very large scale development of Hyderabad whether state is divided or not

Source: www.exclventures.com 4/2/10