‘IT cannot grow unless government shows seriousness’

Face to Face

Jahangir Raina is the founding chairman of Information and Communications Technology Association (ICTA) J&K, member J&K IT Task Force, and an entrepreneur. After graduating in Operational Research from the London School of Economics, Jahangir Raina worked for British Telecom and later at the Phillips Group before establishing a startup business in the Valley under the name iLocus. Raina in an interview with Greater Kashmir talks about the challenges to the IT sector in the state. Excerpts

What is the state of IT industry in J&K?
 I think it would be safe to suggest that the IT industry in the state has grown past infancy. The Valley tends to have more software and digitization business units while the entrepreneurs in Jammu have focused more on hardware trading. So there is a nice balance there. The local IT industry of J&K recorded an estimated turnover of Rs 124 crore during 2011-12. Around 55% of that turnover came from BPO, software and networking businesses.

When you talk of BPO in Jammu and Kashmir, which segments you include in this category?
 Digitisation and Customer Relationship Centres. Digitisation business is mainly flowing in from the central government and national IT companies. It typically involves data entry, digitalization of records, and other allied business. Customer Relationship Centres on the other hand are call centre operations outsourced by the cellular operators to local entrepreneurs.

The BPO segment in the metros is very versatile and also includes back office technical support and remote network management. Why have the state’s entrepreneurs not ventured into those areas?
 There are certain infrastructural constraints. We do not have adequate office infrastructure for IT companies in J&K. The data communications connectivity is still not up to the mark. In such a scenario, the comfort level of customers who outsource projects is not favourable. We will, however, be able to crack that in coming years if the state government wakes up to the infrastructural demands.

What about office infrastructure available at Rangreth or the planned IT park at Ompora?
 The space available for IT companies at Rangreth is very limited. About half a dozen IT business units have been accommodated at the industrial complex there. The Rangreth Electronics complex, as it is known, is not about electronics anymore. You find all sorts of units including shampoo, spices, steel, apple, juice etc. Regarding Ompora, the work is yet to start. The local IT industry was also promised HMT as an alternative. However that plan has been rolled back. HMT would have been a better alternative. It could have been turned into a dedicated facility for IT units only.

You started your own venture, iLocus at Rangreth. What made you move out of Rangreth?
 We took up our office space at Rangreth simply because at the time of our inception, dedicated datacom connectivity was available only at Rangreth through Software Technology Parks of India (STPI). As the telecom market got deregulated we had options in the city as well. We therefore felt no special advantage being located in the industry complex at Rangreth. Besides, the rentals at Rangreth are grossly inflated. We as IT units were supposed to get subsidized rates as per STPI-SIDCO MOU. No such benefits were passed on to us by Sidco. The government also needs to appreciate that the valley entrepreneurs have thus far focused on software and BPO segments. An industrial area is hardly appropriate for such operations. It is a total mismatch.

 Apart from the absence of a dedicated IT park, what are the main challenges the IT sector is facing in J&K?
 The sector cannot grow unless the government shows seriousness to actively promote it. The IT entrepreneurs of the state have created over five thousand jobs without any help whatsoever from the government. The employment potential is huge. But that potential cannot be realized without the government help from here onwards. In order to grow we have to remove infrastructural constraints. Government has to proactively seek investment in the state. Industry incentives have to be extended seamlessly to IT units. In the short term, local companies have to be roped in to implement e-governance projects to build their capacities. Local companies are usually bypassed when it comes to commissioning e-governance projects. There are other challenges as well. We have limited linkages to the booming IT sector of the country thus limiting our potential to grow. A huge skill gap exists in this sector as the technology graduates are not market ready. Attrition has also been a major challenge for the startup IT units in the state.

How far has ICTA been able to address those challenges?
 I think ICTA’s model of advocacy is a great example of how neutral industry forums and state governments can work together towards common benefit for a sector. The state IT department, a year ago, empanelled local IT companies to implement e-Governance projects. The empanelment is a win-win for both the state government and the local IT sector. By mandating local IT companies to implement these projects, the IT department will be able to speed up the implementation of e-Governance initiatives and at the same time boost employment in the IT sector of the state. The empanelment of local companies was a result of a concerted period of advocacy by ICTA to promote the local IT sector. As a result of this advocacy the state government put in place another major policy decision which makes it mandatory for centre-funded large e-Governance projects like State Wide Area Network (SWAN) to include participation of local IT companies. The policies are unique to the state of J&K only. No other state within India is known to have such promotional policies in place for their respective IT sectors. As a result of our advocacy the state IT Task Force was set up. We aggressively pushed the case for a dedicated IT park and almost concluded that effectively.

It seems that the government has done its bit in promoting the IT industry. Why do you then maintain that the government is not reciprocating?
 The momentum gained through those policy decisions came to a grinding halt during the second half of last year. All those policy decisions that I just mentioned were made during the financial year 2011-12 which was really the only time when the post of Secretary IT was not a punishment posting. It just goes to show that motivated officers are capable of thinking positive. Credit goes to bureaucrats at the helm of affairs at the time who framed all these policies to promote the local IT sector. They also managed to secure a recommendatory clause from the planning department that enjoins upon all the administrative heads and DDCs to earmark 1.5% budget outlay for IT related activities. The IT Task Force also had regular meetings during 2011-12. There was a lot of positive energy around. All that momentum has come to a grinding halt now. Projects that were in the pipeline for the empanelled companies have not been commissioned by the department. The IT park development at Ompora has not taken off. HMT as an alternative option for a dedicated IT park has been shelved.

The state government is faced with many challenges on different fronts. One could give them the benefit of the doubt for not giving IT the due attention. What is the urgency in prioritizing IT?
 It is in the interest of govt to prioritize IT. The UPA govt at the Centre is aggressively pushing direct cash transfers through Aadhar. They have pinned their hopes on the completion of this project. Aadhar and similar other e-governance projects are key to success of any future govt in providing efficient public services.

Lets us assume that government will get its act together. What is the scope of IT sector in J&K and what kind of potential are we looking at?
 As I mentioned earlier in the conversation, the sector has generated jobs for over five thousand skilled youth in the state without government’s help. If the state government involves local IT companies in e-governance projects that figure will go up by at least 50 percent immediately. Given the growth rate in job creation, our projections tell us that this sector can recruit up to 80 thousand skilled youth within the next five year period. Those projections are based on the assumptions that we have a dedicated IT park by then, a proactive govt involving local companies in e-governance projects, and most of all the assumption that we establish a working model for building sustainable relationship with the corporate IT sector of the country.

As ICTA Chairman what policy recommendations would you suggest for promoting IT sector in the state?
 I think the government has already created vessels for the right sort of results. It is just that those policies need to be implemented and adhered to. Basically, the state govt has to regain momentum that it had earlier created in IT sector. We have the task force set up for promotion of the sector. Let that task force be given back the mandate it had. Let it be made more active. We have secured the clause of mandatory participation in large e-governance projects like SWAN. Let the participation on those projects be made broad based, transparent, and competitive. Perhaps the best vessel for promotion of this sector in the short run is the empanelment of local companies. Let the IT projects that were in the pipeline be commissioned to them. Right now empanelled companies are being bypassed which is the single biggest setback suffered by the local IT sector.

Final word for budding entrepreneurs in the field of IT?
 Do not ignore the state government’s e-governance projects. That represents your fundamental business opportunity. Over time you need to build your network within the corporate IT sector in the metros because that is where most of your business will flow from. While you address these opportunities, never compromise on your drive to innovate and truly add value to global IT industry through world class IT solutions and services because that is the only way to get noticed globally.

Lastupdate on : Thu, 7 Feb 2013 21:30:00 Makkah time
Lastupdate on : Thu, 7 Feb 2013 18:30:00 GMT
Lastupdate on : Fri, 8 Feb 2013 00:00:00 IST

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