R Chandrashekhar has been appointed as the Secretary of the Department of Information Technology (DIT) at a time when the industry is grappling with the pressures of an economic slowdown besides protectionist measures from countries like the US and UK that could hit business prospects hard. In a chat with Kirtika Suneja , he lays down the government roadmap. Excerpts:
What are the DIT’s priority areas?
Our priorities emanate from the President’s address like pushing the e-governance agenda for making services available to the Panchayat level. So, there will be an intensification of these efforts. Our long-term goal is to have a point of delivery of services and and accelerating the Common Service Centre (CSC) programme for 2 lakh villages.
Also, there is the related area of accelerating the quality of governance services in the CSCs by following the National e-governance Plan. These include the Mission Mode Projects (MMPs). In the short-term, we are fast tracking the programmes to make limited services available through CSCs because services at the backend take time.
What has been the progress on the MMP front?
Individual mission mode projects are in various stages of development. Recently, the state Police MMP was sanctioned at a cost of Rs 2,000 crore. Before this, the MCA-21 was implemented and the completion of the e-Passport Seva is also close. Many others like agriculture, employment exchange, among others have been approved and are at various stages of development.
How will the e-governance plan pan out?
There are other flagship large-reach programmes like the Sarva Shiksha Abhiyan, National Health Mission, Bharat Nirman, among others that can make e-governance initiatives more targeted and aligned. These are developmental programmes that will have a digital service delivery.
For instance, the State Wide Area Network (SWAN), a project worth Rs 3,334 crore, received Cabinet approval in 2005. The CSCs were envisaged for Rs 5,700 crore and the actual expenditure is twice that. For the state data centres, the investment was Rs 1,650 crore and the plan is still rolling forward.
For Bharat Nirman, there is an authorisation that 2-3 per cent of the outlat has to be on IT systems. These IT- based systems will ensure both delegation and control besides transparency and the availability to a large number of people. So, a high degree of social audit and public scrutiny will be possible.
And what about the other important issues you plan to tackle soon?
Growth of both the software and hardware industries is uppermost for us especially because the software sector has been impacted adversely by the global developments as we export around 80-95 per cent of the software and services.
It has become all the more important to ensure that India remains competitive in this scheme of things and also a competitive and attractive location for investments as the industry’s growth rate plummeted from 30 per cent last year to 16 per cent and is flat now.
This is because many companies have curtailed their IT spends. Add to this the global meltdown and the result has been increased margin pressures for the IT companies and contract renegotiations.
But won't US' protectionist measures harm India's software interests?
The US will have to take into account its own interests and there are many studies to show that most outsourcing is beneficial to both the US and India. We hope that there is an enlightened self-interest guiding the policy so that the situation is win-win for everyone.
What are the challenges from other low-cost destinations?
Emerging countries like the Philippines, Vietnam, South East Asian and CIS countries are a challenge for us to make new strategies to meet this challenge. Hence, we need to foster growth in Tier II and III cities where costs are less than half of the big metros. We can increase penetration in the hinterland by providing infrastructure and incentives for players to move there. This is beneficial for the country as it will lead to equitable growth and employment opportunities in smaller towns, this can be a silver lining in times of slowdown. It will also encourage local entrepreneurship.
Chapter Two of the IT-ITeS industry will be based on the rise of the domestic sector and generation of new services. The IT sector couldn’t insulate itself from the crisis because it depends on exports but with increase in demand and pressures on supply side from the global markets, the domestic sector will grow. We should be looking at a growth of 50-100 per cent for the domestic sector in the coming years.
What about the hardware industry?
The hardware industry is becoming increasingly competitive, especially with global players looking at the burgeoning Indian domestic market. Meanwhile, all industry associations have made suggestions in the context of the taxes. While relaxation in taxes will stimulate manufacturing, measures like rapid growth of broadband and building an ecosystem around it will also help. India is both a huge consumer and supplier of these services.
What sort of outlay does the DIT expect from this budget?
In terms of expenditure, the DIT has been receiving increased allocation. It was Rs 10 crore directly six years ago. However, much of the expenditure on IT is contained in the budgets of different departments. Our estimates show that the total order of spending on IT is about Rs 5,000 crore per year.
The software industry has been demanding an extension of the Software Technology Parks of India (STPI) scheme...
Yes. An extension of the peiod of tax holiday is desirable and a stable extension of this tax incentive is necessary especially in the downturn to maintain India and the IT industry competitive. We have approached the Finance Ministry for this and have been assured that all suggestions will be looked into.
What is the progress on the semiconductor policy?
We have issued in-principle approvals to 12 projects because they have reached a stage where the project is clearly defined, product line and the technology decided, land allocated and the investors are clear. Total project outlay in terms of investments is Rs 77,000 crore while India has received proposals worth Rs 1,57,000 crore for setting up fab units under the semiconductor policy.
These proposals have been looked at and will be given a financial sanction that guarantees financial support, after their financial close. There are a total of 18 projects of which 12 have been approved, 4 are companies are taking a fresh look at their proposals and 2 have been asked to complete some steps like getting the land formalised.
