Cong govt may continue with land policy for IT firms

Despite voicing dissent when it was in the opposition not very long ago, the new Congress government in the state may have to follow the footsteps of the TDP government in providing land for new IT companies and the infrastructure required to boost the IT industry in the state.

According to the projections made by state IT department, at least 1,000 acres of land may be required for the operations of new software and IT enabled services companies which are expected to come in the next five years. Out of this demand, half of the land would be required in and around Hyderabad only.

IT park developers like DLF, RMZ, Vanenberg have already approached the state government for land allotment near the Hitech city and elsewhere in Hyderabad. The space requirement as estimated by the IT department would be about 30 million square feet in the next five years.

The present IT policy provides several concessions to software companies apart from providing rebates on land purchases. According to sources, the Delhi-based DLF Group had approached the previous government just before elections for acquiring 200 acres of land near Madhapur for the purpose of developing infrastructure for IT operations.

The Congress had created a big issue in the state Assembly when the Naidu government began allotting lands to real estate firms like Raheja's. But the TDP government had justified its stand, saying that immaterial of who developed the infrastructure it would ultimately be utilised for IT operations only.

The state government offers a 25 per cent rebate on power bills and stamp duty reimbursement to the extent of 50 per cent. The state government offers price concessions on land of Rs 20,000 for every job created.

Soon after assuming charge, chief minister Y S Rajasekhara Reddy had clarified that a review of the previous government's decisions on land allotments would not mean a reversal of the IT policy. There are some government officials, however, who are skeptical that he may not act as proactively as his predecessor in the matter of land allotment to new companies.

A senior minister in the Rajasekhara Reddy government told Business Standard that the purpose of the present review is only to check whether the concessions prescribed for the IT companies actually went to genuine companies or whether the concessions were misused.

So far about 40 IT companies have received government land at concessional rates, according to Andhra Pradesh Industrial Infrastructure Corporation (APIIC) sources.

But APIIC officials are tight-lipped over the total extent of land given away to IT companies and the list of beneficiaries.

Land allotment to IT companies in the state has become a big issue when the real estate companies like the Mumbai-based Raheja's came into the picture. Commenting on the issue, an official in the APIIC observed that it is more advantageous to allot land to the builders as the marketing or attracting IT companies to the state would become their prerogative.

The IT department now wants to expand the state's IT base to Tier-II cities like Vizag, Vijayawada and Warangal.

"Demand for land is very high," says an official in APIIC. "We have building plans submitted by companies like Pioneer, Value Labs and iLabs with an estimated cost of about Rs 500 crore in the Hi-tec City limits alone," he said.