We are in the process of coming out with a rural IT policy



Karnataka has been in many ways the torch-bearer of e-gov initiatives in
the country. All stakeholders of e-gov cite its land records project Bhoomi as a
landmark achievement. While in the late 90s and early part of this decade
Karanataka marched ahead on the e-gov chariot, it seems to have hit a roadblock.
However, things are looking up with Ashok Kumar C Manoli as the principal
secretary, IT, Govt of Karnataka taking over the reins. Excerpts from an
exclusive tete-a-tete with Dataquest

What is the status of the new Karnataka IT policy?
The Karnataka IT and BT Minister and the Karnataka Chief Minister have
indicated that the state is contemplating, and is in the process of coming out
with a policy aimed exclusively at rural IT, called IT rural Policy. This will
be aimed at spreading the IT success into tier-2 and -3 cities like Mysore,
Hubli, Darwar, Mangalore, and Shimoga by appropriately designing policies. The
other policy being discussed and sorted out is a state specific semiconductor
policy. The government is in the process of drafting the semiconductor policy in
consultation with various stakeholders like ISA, Nasscom, and MAIT.

How many new companies were registered last year? And, are there any new
investments in the state?
During FY 2007-08, 118 new companies were registered and there is a good
investment proposal coming up in the state. Many new companies have already come
up or are in the process of setting up operations. We are also planning to have
an investors meet to attract more investment. IT/BPO, tele-medicine, legal
outsourcings, and data mining are some of the new areas of investment, and
various companies are contemplating new projects. The growth of new software
companies also continues, and significant investments are expected this year as
well.

What is the status of the Bidadi Knowledge Township project? Any other
similar initiatives?
The Biddi Knowledge Township project is on. And the agency has also been
fixed and initial notifications required for initiating the project have been
taken. Another similar initiative taken by the Karnataka IT department is to
develop IT and technology parks in tier-2 and -3 cities by acquiring and
developing infrastructure that will suit the growth of IT in the state.

Can you share an analysis of software exports from Karnataka during the
last fiscal?
Software exports last year were approximately at an addition of Rs
7,000-8,000 crore, we reached around Rs 55,000 crore last year registering a
growth of 14%.

Your comments on the extension of tax holidays for STPI scheme to 2010

The extension of STPI tax holidays will help companies that are in the
process of setting up new industries. The major benefits will be for small and
medium players that require tax holidays in the initial stages, so this gesture
is a welcome measure for the growth of the SMB segment in the state, and also
for the IT industry.

How have you progressed on the paperless office project for your
department?
The paperless office is progressing very well and the implementing
departments are further using the concept of paperless office. The aim of the
project is to minimize the use of paper in the departments; actually it is a
less paper office not paper less office. Our departments are continuously
reinventing the paperless office project and trying to extend its status.

The real estate prices are going up and much of the developed space
remains unoccupied, and companies are moving toward SEZs. How will this affect
IT in Bangalore?
Bangalore continues to be the second hottest space absorption city next to
Tokyo. According to official reports the space occupation in Bangalore is 14.2
mn sq ft and recorded a 53% growth for FY 2006-07. Though the real estate prices
are going up, the economics of the business continues and the companies are
reinventing and redesigning themselves by cutting cost and using appropriate
technologies. The companies are also trying to spread their network into the
domestic areas, so the cost balancing will take place though accommodation of
space continues to be a problem.

The companies moving toward SEZ would require assets to be transferred from
the existing facilities to SEZ, which is difficult for many big companies, as
they have invested huge amounts of money in their facilities. However, for newer
small companies, SEZ is a boon and will help their growth.

Is there any particular scheme from the government to help the small
companies?
We have a fund called KITVEN Fund managed under a government trust called
KITVEN Trust in which SIDBI is also a partner. It is a VC fund set by SIDBI,
KSSIDC, KSFC, and KBITS and is totally an asset management company registered
with the Securities and Exchange Board of India (SEBI), dedicated to investing
in companies in the IT industry. The trust has invested around Rs 17.56 crore in
17 companies, including Relq Software, Logix Micro Systems, Comat Technologies,
and 24X7 Solutions. With a success rate of 70% in the KITVEN Fund-1 the IT
department has decided to launch the KITVEN Fund-2 very soon which will be
extended upto Rs 20 crore.

Pradeesh Chandran
pradeeshc@cybermedia.co.in

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