Andhra Pradesh sees major dip in its IT exports

VISHAKAPATNAM: Chief Minister N. Chandrababu Naidu likes to refer to Andhra Pradesh as the Sunrise State. But three years after bifurcation, the sun has yet to rise for the state’s Information Technology (IT) sector. During this period, the sector has remained in the shadows, without major investments or the entry of new players. IT-related exports have only witnessed a marginal improvement in comparison to the neighbouring state of Telangana and other major IT hubs. Cardinal reasons for the stagnation of the IT sector are the State Govern-ment’s failure to implement its IT policy, and the lack of proper infrastructure and ecosystems.

When united AP underwent bifurcation, the IT-related exports from the residual state of Andhra Pradesh amounted to Rs 1,500 crore, while those from Telangana amounted to Rs 60,000 crore. Today, IT exports from the state are about Rs 2,000 crore, while those from Telangana have increased to Rs 1 lakh crore. Of the Rs 2,000 crore, about 80 per cent is contributed by Visakhapa-tnam, which is considered to be the IT hub of the state. The rest comes from Kakinada and Tirupati.

Over the past three years, only 10 to 15 small units have been set up, and no new players have entered the state. O. Naresh Kumar, the vice president of the of IT Park Association of Rushikonda, said, “The main reason for this is that the state’s IT policy is attractive on paper, but its implementation leaves much to be desired. We hardly receive the incentives promised in the policy.  Other reasons are the absence of ready-made office spaces and suitable ecosystems.”

IT firms say that they have not received the incentives promised to them. This includes subsidies for rent, power, and bandwidth consumption, recruitment assistance and stamp duty reimbursement. Mr Naresh Kumar pointed out that companies were forced to pay a rather high amount of Rs 1.25 lakh for an internet bandwidth of 100 Mbps. Another software exporter said that five persons had occupied the post of IT Secretary over the past three years, as a result of which there had been inconsistencies in the implementation of policies.

The cost of power is also prohibitive to the growth of the IT sector. On the surface, the power tariff for the sector is Rs 6.5 per unit, but after factoring in the hidden charges the final tariff works out to about Rs 9.5 per unit.  “This is one of the highest in the country,” Mr Naresh Kumar said. Exporters feel that the least the State Gover-nment can do is to set up an office of the IT Department in Vizag. As of now, the Department is based in Vijayawada, from where there are hardly any IT-related exports.