The initiative to benefit small and medium enterprises (SMEs) in the information technology (IT) space in Andhra Pradesh, which was introduced as part of the state’s IT&C 2010-2015 policy, has failed to gain momentum among SMEs in the state.
The initiative — which was to unbundle the big-ticket government IT projects that are coming to the state across hardware, software and system integration (SI) verticals and divide those into smaller projects to benefit SMEs — is facing hurdles in its implementation.
“SMEs are left out in most of the big-ticket projects. So, this initiative was taken so that the small players can take up projects,” Sanjay Jaju, secretary, IT&C department of the AP government, told Business Standard.
Under the IT&C 2010-2015 policy, the state government has mandated that at least 10 per cent of all system integration projects worth Rs 2.5 crore and above must be outsourced to SMEs by bidders, and SI projects worth Rs 2.5 crore and below are reserved for SMEs with an annual turnover of between Rs 5 million and Rs 10 crore.
However, even now most IT SMEs are not benefiting from the policy.
“The state houses around 1,000 IT companies, including around 700 SMEs in the IT domain, but only 72 companies are empanelled with the Andhra Pradesh Technology Services (APTS) to get the benefit of the initiative,” said Murali Bollu, head (SME forum), ITsAP (IT & ITES Industry Association of AP), a registered apex body with more than 300 members, which represents the software industry in the state.
“The initiative is not gaining momentum owing to multiple reasons. Most SMEs are not empanelled under the APTS, which restricts them from getting the benefits of the initiative. Other reasons include lack of awareness among SMEs about the policy, and also lack of awareness on how to get empanelled, since not much information is available on how to secure government projects,” Bollu added.
“As per the definition of SMEs, any enterprise having annual revenues of less than Rs 10 crore comes under the SME category. But now, most of these enterprises are crossing the Rs 10-crore turnover mark; so, this is also creating another hurdle to getting benefits from the initiative,” he said.
Recently, the state government recommended the unbundling of some components of the upcoming Rs 60 crore project to digitise records at the district level.
