A Bird in Hand…

A red ‘facilitation’ carpet that ensures a smooth ride even on the bumpy

roads of bureaucracy, a bank of the resumes of trained IT professionals and a

little welcome gift in cash…sounds like an enticing offer? Well, the Kerala

government’s attempt to attract IT investment into the state, is meant to be

just that.

The Kerala government’s ‘Early Bird’ scheme offers a one time, time

bound incentive of Rs 50 lakh to IT companies that set up operations in the

state before June 30, 2002. Announced in December 2001, the scheme has being

availed of by six IT companies so far. And Kerala IT Secretary Aruna

Sundararajan is confident that four more IT companies that have displayed a ‘keen

interest’, will avail of the scheme before the cut-off date.

Among the fresh entrants that will avail of this opportunity are Germany

based BNS Software AG, Japan’s DSI Technology and Netherlands’ Proxy

Software. According to the scheme, each of these companies will make an average

annual investment of Rs 20-25 crore over the next three years.

The scheme is also open to companies who already have a presence in Kerala

but have committed to expand their operations. Among these is Hays, a billion

pound UK based BPO company with 350 people in Kerala. The company plans to

expand to 700 people and establish its headquarters in Trivandrum. Then there

are homegrown companies like Nest and US Software. Dabbling in software services

and e-commerce, US Software started with 14 people in 1999. It has 700 people on

board as of today and plans to scale to 1000. Kerala’s first CMM Level company–Nest

already has 3000 people in Kochi and Trivendrum.

"The new players will also invest in facility, while the established

players will make significant investment in hardware" points out

Sundararajan. Companies already established in the state are required to make a

commitment of recruiting at least 200-250 new people over the next three years.

The new entrants are expected to recruit at least 500 new people over the next

three years.

So, are companies bound to recruit professionals from Kerala alone? "No,

Kerala is one of the few Indian states that does not have a ‘sons of the soil’

policy and incentives for companies are not based on the origin of the people

recruited by the company," says Sundararajan. Apart from the cash

incentive, companies will be provided with the services of a ‘facilitation

cell’ to be set up by Kerala’s IT department. "The cell will hand-hold

companies through all the issues involved in investing in a new geography. It

will smoothen out a gamut of problems–from handling procedures like

self-certification and disbursement of subsidies/grants, operational

requirements like power and aid in recruiting talent to soft issues like school

admissions for the companies’ employees. The IT department is also working on

setting up an online facility that will enable companies to enlist for the

scheme online. Well, the red carpet might help in bringing companies to Kerala,

but how ready is the state to support a burgeoning IT industry?

As against the brand equity developed by southern state capitals like

Bangalore, Hyderabad and now Chennai as hot spots of the Indian IT industry,

Kerala has no distinct metro to showcase. "But this itself is an advantage.

The trained manpower here is distributed across the state and not restricted to

one specific area," says Sundararajan. She also believes that

traditionally, professionals from Kerala have believed in stability on the job

front and this is a quality that IT companies will welcome. "Even during

the IT boom, the attrition rate in Kerala was under 5%," she says. Long

innings ahead!

Manjiri Kalghatgi in New Delhi