Poll pot heating up, IT policy put in deep freeze

Industry says delay will deprive IT firms of positive impact

It has been almost a year since the state's 2006 Information Technology (IT) policy that had a tenure of five years expired but the fate of the new policy is uncertain because of the looming Assembly polls.

Government officials and experts in the sector say the new policy is expected only in 2013 and that the delay could hamper prospects of the state that missed the IT bus a decade ago.

"The draft for the new policy is ready but changes are being made. It is now awaiting approval from the chief minister. The policy does not necessarily stand postponed but it could take time once the code of conduct comes into place before the elections," says Ravi Saxena, additional chief secretary in charge of the state government's science and technology.

"The state's IT sector is not even one-tenth of the size of what Karnataka or Andhra Pradesh have but it is growing steadily.The industry would definitely lose out if a new IT policy is not ready soon. We expect the government to give more importance to local IT players instead of big IT companies in the next policy," says Sunil Kakkad, president of Gujarat Electronics and Software Industries Association (GESIA) and MD of Sai Infosystem Ltd.

The current size of Information and Communication Technology industry in the state is around Rs 5,000 crore and it employs around 60,000 people. There are about four to five IT SEZs notified in the state, but most companies have bowed out owing to heavy minimum alternative tax (MAT).

Jay Ruparel, chairperson, ICT & Automation Committee of the CII (Confederation of Indian Industry), says, "Going by the feelers from the state government, the earlier IT policy will be extended. With elections around, no new policy announcements will happen. The extension of the old policy will delay the positive impact that the industry could have experienced. A lot of business of voice-based processes are now going to Philippines, which is emerging as a preferred IT destination since the operating costs there are comparable to India."

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