S Ramadorai is known to wear multiple hats and is prolific across sectors. After a career spanning four decades with TCS,Ram, as he is popularly known, continues as Vice-Chairman of the country’s largest software exporter.

Since February 2011, he has served as the Chairman of the National Skill Development Agency (NSDA) in the rank of a Cabinet Minister. He is also the Chairman of the National Skill Development Corporation (NSDC), a publi- private partnership arm of the Government of India.

The 68-year-old Ramadorai is also the Chairman of AirAsia India, the newest entrant into India’s aviation sector. In an interaction with Business Line , Ramadorai talks about measures that the new government should take for ushering the next round of growth in the Indian IT industry. Edited excerpts:

Could you highlight three interventions that the new government should make in the Union Budget to further stimulate the IT industry’s growth.

Firstly, the government should stimulate IT adoption and absorption in the micro, small and medium enterprises space. The increase in IT demand will have a cascading impact on SME IT firms (who constitute the larger IT supply ecosystem), as it will generate demand for indigenous IT products and services.

Secondly, encourage the ICT hardware manufacturing sector through inward investment and incentives. India consumes a huge amount of ICT hardware largely supplied by MNC firms. Replacing imports by indigenous manufacturing through FDI will enable India to curtail expensive imports. It will also foster another ICT industry segment for exports. More ‘technician’ jobs will get created in both manufacturing and services.

Thirdly, there is paucity of IT skills at the lower end of the spectrum, especially for positions such as data entry operators, hardware technicians, Web site/portal operators and network technicians. A majority of the workforce in micro and small firms constitutes those with high school education background transitioning from agriculture to industrial livelihoods.

The only training they receive is typically on-the-job with little opportunities for continuous skill development. As IT adoption proliferates, there will be a higher demand for operational skills by first time IT users. Therefore, there is an urgent need to develop skilled human capital especially in Tier 2 and Tier 3 towns and rural locations.

It is imperative to improve the quality of vocational educational institutions. Barring a small percentage of institutions, majority of the vocational education institutions do not offer skill building on IT. Many institutions have outdated curriculum with no standardised assessment frameworks.

Would you agree that additional fiscal incentives are needed for SME IT companies to flourish?

The Government can stimulate the SME IT sector by focusing on some key demand creation measures. It can provide help with quality certifications, access to testing laboratories (especially for SME hardware manufacturers), access to financing and so on.

The Government must gradually morph its role from that of direct intervention to becoming an enabler for developing India’s technology innovation ecosystem.

It should establish a corpus to energise seed stage/angel funding. Instead of investing directly in start-up IT firms, the corpus should act as a ‘fund of funds’ and provide capital to VC funds focused on early stage ventures. This will enable the Government to leverage the expertise of the private sector.

Industry bodies have been pressing for a rollback of Minimum Alternate Tax on SEZs. What is your view on this?

The Rangachary committee had undertaken a holistic review of SEZs and other taxation issues related to the IT sector. The committee's recommendations were comprehensive and should be implemented in their entirety.

Several e-governance projects have been unsustainable for software services firms largely because of delays, unsustainable payment terms and non-streamlined procurement processes. How can the new government make things better?

In today’s digital world, technology systems need to be adaptive to user requirements and solutions often change dynamically through the lifecycle of a typical large project or system implementation. Robust procurement and governance process need to be designed to support this need for agility.

Government procurement and governance processes were designed in an earlier era when capital projects were more predictable and had a long gestation. These need to be modified to align them to today’s world of collaborative vendor partnerships.

We find that at the operating level most stakeholders agree with this view, though they are constrained as they need to adhere to the existing norms. A systemic review of the procurement and governance process for eGovernance projects is now required to drive greater private sector participation.