Section-A:

Digital Documentation

Topic: Telangana – IT Sector

Contents :
IT industry on growth path
Policy making a difference on the
ground.
Harnessing Talent Pool
Two industrial clusters in the
making .pg1
 IT Industry on Growth Path
Telangana’s IT sector was mainly driven by IT and ITeS companies set up in Hyderabad since
the 1990s. The sector has played a vital role in putting India on the global map as almost 11 per
cent of the nationwide IT exports are contributed by Hyderabad alone. After the formation of
the State of Telangana, this sector has seen an upward surge after coming under the aegis of IT
Minister K T Rama Rao.
Under his Ministry, Telangana IT exports stood at Rs 85,470
crore in the year 2016-17 with a growth rate of 13.85 per cent.
Apart from India-born IT companies like Tech Mahindra,
Infosys, Wipro, Cognizant, TCS, Hyderabad is also home to
many multi-national companies like Google, CA
Technologies, Amazon, Apple, IBM and others. “Our
regime’s focus is to make Hyderabad the number one
destination for IT sector,” Rama Rao has echoed time and
again. n order to facilitate IT and ITeS organizations, the
government has been aggressively setting up Export Oriented
Units (EOU), Special Economic Zone (SEZ), and Software
Technology Parks (STP). In terms of employment, the State added 24,506 professionals in the
last one year taking the total direct workforce in the IT/ITeS sector to 4,31,891.The government
is planning to take these number to 8,00,000 direct employment and 20,00,000 indirect
employment by 2020. According to experts, Hyderabad’s cosmopolitan culture and it being
less prone to natural disasters make it a congenial place for IT companies set foot. Other than
this, various subsidiaries and incentives from the government’s side have also made the
industry pave new heights. Not only the IT or ITeS space, the incentives have given birth to
new industries like aerospace, multimedia and gaming.
Due to this, many IT companies and MNCs have set up their centres in the city. For example,
Amazon has five centres in Telangana including one
of its largest in near Hyderabad. Similarly, Apple
chose Hyderabad to set up its Map Development
Centre and Salesforce set up its centre of excellence.
Other companies like Uber, DBS, ValueLabs and
many more have made significant investment in the
State in general and Hyderabad in particular. Other
than the companies, the government is also pushing
for allied services in the sector. In order to provide
broadband connectivity for all, Telangana government
launched the ambitious T-fibre project which is set to complete by 2018. In addition, the State is
also launched 1,000 public Wi-Fi hotspots in Hyderabad and plans to set up in 2,000 more
locations.

Policy making a difference on the

ground.
Telangana government is doing several things correctly. It has come out with comprehensive
sectoral policies across sectors and more importantly in the IT space. An ecosystem has been
created for multinational companies to set up their subsidiaries and startups to set up their
operations. The government is proactively providing support to industry to set up shop by
maintaining transparency in the procedures to establish operations, say industry experts.
The Industrial Policy Framework 2014 identified 14 thrust areas to be given high priority for
investment in Telangana. The framework included incentives such as preferential land
allocation, project support basis investment, proposed industrial parks and townships, fast-track
approval mechanisms and tax sops/subsidies. The industrial policy and other initiatives have
given a competitive edge to Telangana over other States. The Central government which
evaluates States on several parameters has ranked Telangana No. 1 in terms of ease of doing
business (EODB) by looking at the policy framework that the State has created. The positive
momentum created is anticipated to get more investors into the State.

Industry experts recommend that the State should retain its top ranking by continuing to make
efforts in improving the interactions of the companies with that of the government and
regulatory officials. With more organizations setting up and expanding their existing
operations, Hyderabad has witnessed a lot of construction activity in the IT corridor...”
Experts point out that the growth in the State’s economy needs to be retained. As the
neighboring States are witnessing slow progress, Telangana can maintain its momentum. The
State can stay invested in the new age technology segments such as Data Analytics, Artificial
Intelligence, Internet of Things and Machine Learning. TiE Hyderabad president Pradeep
Mittal said, “Central government began ranking States on several parameters. Telangana is
competing not just with neighbouring States but with other States. In addition to ease of doing
business, infrastructure, startup ecosystem, institutions and research labs. The State should
continue seeding this growth as there will be a lot of competition challenging its position on the
top.”

Harnessing Talent Pool

The IT sector in Hyderabad has grown by leaps and bounds since the formation of the new
State of Telangana. And the government under the aegis of the IT Minister K T Rama Rao
plans to double the growth in next few years. For this purpose, the government in April 2016
launched the Telangana State ICT policy to harness the talent pool available and to make
Telangana the IT destination of India. In its vision statement on ICT policy, the government
said it plans to make Telangana the most preferred destination for any IT company, should be
recognized as the leader in key emerging technologies and aims to intensively use IT tools to
improve processes and deliver citizen services better.
In order to achieve the said vision, the 10 sectoral policies were also launched by the
government subsequently which include the electronics policy, gaming and animation policy,
rural technology Center policy, innovation policy, open data policy, data analytics policy, cyber
security policy, data center policy, IoT policy and e-Waste management policy.
Industry experts have heaped praises on the forward-thinking approach of the government to
roll out policies on such niche and important sectors. According to experts, the ICT policies will
attract investments for infrastructure, promote the industry in tier 2 and 3 cities, encourage
innovation in disruptive technologies and enable the existing SMEs to grow.
“All the policies rolled
out by the Telangana
State has the promise to
attract very high
investments and has the
potential to make it the
number one investment
destination in the
country. It will also lead
to large scope of
employment generation
and economic growth.
In sheer numbers, it
shouldn’t be a surprise if
the investments in State surpass Rs 5 lakh crore at the current pace, and add employment
crossing 2 million jobs while bolstering the State tax revenues and overall development,” said
Sridhar Pinnapureddy, founder and CEO, CtrlS Datacenters. The government plans to set up
two Electronic Manufacturing Clusters (EMCs) spread over 600 acres and 310 acres at eCity
and Maheshwaram Science Park.

Two industrial clusters in the making

Two industrial clusters, which will be managed by women entrepreneurs, are in the making
near Hyderabad. Both of these could attract more than Rs 500 crore investments and create a
direct employment for 15,000 to 20,000 people even as the indirect jobs will be multi-fold.
One of them is coming up at Sultanpur in about 55 acre through the Fisci Ladies Organization
(FLO) while the second project is at Nandigama in about 83 acre at and will be managed by
Association of Lead Entrepreneurs (ALEAP) .Here, women have to be at the helm of
administration of the enterprises. They should have a majority stake in the business.
Engineering works are happening at both the clusters. “This is a good effort from the Telangana
Government to allot an industrial cluster exclusively for women entrepreneurs. About 200
entrepreneurs have already received the allotment letters for starting their units at the cluster,”
said K Rama Devi, president, ALEAP.
The cluster, she said will also have incubation centre on the premises with some common
facilities. It will create some plug-and- play facilities on a pay-per-use basis for those who
cannot set up their own facility. State Bank of India and Canara have come forward to extend
the financial assistance, she said adding that the collateral-free loan, which is for about ten years
with a rate of interest of 11 per cent, will cover the building, machinery and working capital.
Industrial land is not covered and this is provided as the margin money by the entrepreneurs.
The multi-product industrial cluster will have units from food, textiles, engineering, solar,
packaging and others, she said adding that the cluster will provide an employment to about
10,000 at full capacity and about 50 per cent of the facility will be ready in six months, the
president said.
The industry body has earlier executed previously an all-women cluster at Gajularammaram in
the city. Telangana is also extending a similar support to the other cluster at Sultanpur,
according to Ficci FLO Hyderabad chapter chairperson Kamini Saraf.
The 55-acre allotted to FLO is being divided into half-acre units. Only life members of FLO
will be eligible to be part of the cluster. “We have processed 16 applications so far and the
allotments will happen soon,” said Saraf.
“We expect that each unit will see an investment of Rs two crore in addition to the Rs 50 lakh
per acre land costs,” said Saraf adding that about 10 to 20 plots will be finalized by March.