Progress in IT sector eludes AP still

Andhra Pradesh has a long way to go in promoting Information Technology (IT) sector. The foundation stone laid by the IT Minister N Lokesh the other day for new global IT development centre of HCL Technologies, the third largest software company in India, at Gannavaram near Vijayawada marked the beginning of this uphill and arduous journey.

The ceremony also was indicative of IT sector beginning to look up. Though IT sector has undergone a sea change – it is entirely different now than what it was when Hitech city was being built about two decades ago in Hyderabad. Developing this sector now, particularly in Andhra Pradesh, which has been left to the mercy of elements by the centre, is a different ballgame altogether. 

When the state was divided in 2014, AP drew a blank as far as IT companies are concerned since all of them were located in Hyderabad. The reorganised state was left to stare at the dark and foreboding prospect of having to build the sector once again brick by brick. The loss of IT sector to Telangana always rankles Chief Minister N Chandrababu Naidu. It is reflected in his public meetings where he dwells at length on how he had promoted the IT sector in Hyderabad.

In 2017-18, software exports from Hyderabad were about Rs 93,422 crore, showing a Cumulative Annual Growth Rate (CAGR) of 15.6 per cent as against the national average of 10.30 percent. The State recorded IT exports of 85,475 crore in 2016-17.

But in Andhra Pradesh, software exports in 2017-18 were a mere Rs. 246 crore as against a target of Rs. 3,500 crore. In fact, the situation was much better in 2016-17 when the exports were about Rs.2,850 compared to a target of Rs. 3,000 crore.

Though the state has focused its attention on Visakhapatnam for the promotion of IT sector, not much traction is being felt there since the state has many shortcomings. At present, the IT sector needs highly skilled manpower as they have diversified to newer areas to deliver niche services.  Most of the companies are depending on tools rather than on human resources for low-end jobs. The companies are investing more in digital and AI technologies for which highly qualified staff are required.

Hyderabad has the advantage of the availability of qualified manpower since high-end institutions like the IIT, IIIT, CBIT are located there. This apart, already a vast and well-developed infrastructure is available there. The IT sector grew in Hyderabad because IT majors like the Microsoft and TCS set up their centres there, showing the way for the others to move in. Now it is one among top five states that claim 70 per cent of the total software exports from the country.

Though AP has an attractive IT Policy, it is not having much impact on IT majors since what they look for is quality manpower more than concessions though the latter too are important. For this, the state should accord priority to this vital area.  Though a couple of educational institutions are coming up in Amaravati, there is still a long way to go. This, along with an emphasis on SMEs and start-ups, will prove to be a game changer in the changed circumstances. 

Mere soapbox oratory would not convince the companies. The government should be able to build confidence among them that they do not have to look any further for what they need for setting up their development centres. Though the rulers talk of AI, Internet of Things and digital technologies, it is not enough. The proof of the pudding is in the eating. Lokesh has to go miles before he could afford the luxury of sleeping.