The Union Cabinet’s nod for the bifurcation of Andhra Pradesh might have cleared the air politically, but for the information technology industry, the uncertainty persists .
The industry, whose concentration in Hyderabad is one of the reasons why people of the Seemandhra region are agitating against the move , feels the situation may remain unclear until State elections, due in May, are completed .
The industry has taken a secular stand on the issue of bifurcation. Industry leaders such as B. V. R. Mohan Reddy (Chairman and Managing Director of Infotech Enterprises), and J. A. Chowdary (Chairman of Talent Sprint) have been arguing for a clear stance by the parties concerned. The integrationists, however, argue that all the benefits of IT, such as jobs and taxes, will go to Telangana .
The combined turnover of IT companies in Visakhapatnam, Vijayawada, Tirupati and Kakinada (the four cities located in the Seemandhra region) was just Rs 1,629 crore in 2012-13. Compare this with Andhra Pradesh’ total IT turnover of Rs 64,354 crore, chiefly from the Hyderabad region. And nearly one-fifth of this was domestic revenue .
Investment region
Andhra Pradesh contributed 12.5 per cent to the national IT exports of Rs 410,836 crore in 2012-13. The IT industry in the State directly employs 3.27 lakh people, while providing indirect jobs to 10.50 lakh people. Added to this, Hyderabad has just received sanction from the Union Government to set up the country’s first Information Technology Investment Region (ITIR). AP IT Minister Ponnala Lakshmaiah said it would generate 15.5 lakh direct IT jobs over a period of 20-25 years.
The 50,000-acre area, divided into three zones, would also attract an investment of Rs 2.19 lakh crore, with Andhra Pradesh Industrial Infrastructure Development Corporation taking the key job of overseeing the project implementation.
“I don’t think we have arrived at certainty as far as the IT industry is concerned. I think it will take some time before we see certainty. I think it will last till elections are over,” Bipin Chandra Pendyala, Secretary of IT Industry Association of Andhra Pradesh, told Business Line .
Another industry executive said on condition of anonymity that customers of IT companies would continue to ask questions regarding the stability in the State.
“We work on strict schedules and certainty. When it comes to expansion, companies prefer to go to a stable environment such as Bangalore or Pune, instead of doing it in Hyderabad,” he said.
Ponnala Lakshmaiah, however, does not agree with this view.
“The State’s IT export performance increased by 26 per cent to Rs 51,285 crore last year as against the national exports that grew only by 23.5 per cent. The office space occupation too increased,” he said.
Mohan Reddy said since the bifurcation issue had been settled it was better to focus on development of the industry.
“They have taken a decision on this. It is time we rebuild Andhra by constructing a new airport and other infrastructure,” he said.
Ponnala Lakshmaiah said the State was in the final stages of preparing detailed project reports to set up ITIRs in Visakhapatnam and Tirupati. The State has roped in leading consultants to prepare the reports.
“We are trying to develop the industry in all the regions. It will take some time before the situation looks up there,” he said.