RAJASTHAN
An ideal InfoTech destination
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1. Indian IT Industry* The
Indian IT sector has proved to be the country’s fastest growing segment, even
in troubled times-in the globally challenging economic environment of
2001-2003. The software and services industry, a major component of The
following are the core areas of IT : ·
IT software and
services exports ·
IT-enabled
services ·
The domestic IT
market ·
Telecom
infrastructure ·
IT - Hardware 2.
Global Sourcing Trends Worldwide
technology projects and related services sector spends are estimated to have
grown at 7.3 per cent to reach USD 1.7 trillion in 2007. IDC estimates
that in 2008, the worldwide IT market growth will be lower at about
5.5-6.0 per cent, mainly due to the economic slowdown in the US and
elsewhere. IT-BPO
Sector-Overview Indian
IT BPO grew by 33 per cent in FY 2008 to reach USD 64 billion in aggregate
revenue, thus, revalidating its strong fundamentals, despite concerns of a
slowing US economy and supply constraints. Indian's
IT-BPO Value Proportion Strong
fundamentals of a large talent pool, sustained cost competitiveness and an
enabling business environment have helped Future
Outlook Sufficient
demand, strong fundamentals and a favourable
environment support a positive outlook for Indian IT-BPO exports as well as
the domestic market, going forward The Indian IT-BPO industry is on track to
reach USD 60 billion in exports and USD 73-75 billion in overall software and
services revenue, by 2010. At the aspired levels of growth, the sector would,
by 2010, employ around 2.5-3 million professionals, directly, account for direct
investment of about USD 10-15 billion and contribute 7-8 per cent of the b
national GDP. 3.
Domestic (IT-ITeS) The
Indian Information Technology (IT) and IT enabled Services (ITeS) success story and its paradigm changing impact on
global service delivery is now a well acknowledged fact. However, much of the
success achieved by the sector has been attributed to the meteoric growth in
exports – that has overshadowed the latent opportunities unlocked and growth
observed in the domestic market over the past few years. Spotlight
on the Domestic IT Services Market Domestic
demand for IT in Growth
of IT Spending in
The
liberalization of Indian economic policy, de-regulation of key sectors and
progressive moves towards further integrating Similar
competitive pressures in other more recently deregulated service sectors such
as airlines and insurance, and the uptake in the manufacturing and industrial
sectors; and the several large e-governance initiatives launched by the government
under the National E-Governance Plan (NEGP) are expected to provide sustained
growth in domestic demand for IT services over the next few years. Over the
next five years, domestic spending on outsourced IT services is projected to
more than double, from INR 103 billion in 2004 to over INR 238 billion in
2009. Five Year Revenue Forecasts for Key Service Lines in the
Domestic Market (INR Million)
Systems integration and network integration make up a high
growth-large size category within the IT services engagements. These services
will continue to be prime drivers of the domestic IT services market in the
enterprise segment due to the increasing growth in the enterprise application
implementation and increased demand for network integration from telecom
& banking verticals. Domestic IT Services Revenues by Key Vertical Markets The
financial services, communications and media, and manufacturing verticals
accounted for over 3/4th of the revenues earned by service providers
in the domestic IT services market in 2004. The
growth projections for IT service revenues in the domestic market may be
further accentuated by addressing some basic issues highlighted by the
findings of the surveys conducted as a part of this study. A
significant portion of the domestic corporate IT spends still lies in-house,
predominantly driven by a perceived lack of focus by service providers on the
domestic market and a perceived absence of value generated by outsourcing. It
is estimated that in-house spending on IT services (including training costs,
salaries of in-house IT staff and associated overheads) still accounts for
more than half of the corporate IT spend in India, while the outsourced /
vendor addressed spends account for just 45 percent of the total. There
was a strong perception among a majority of the CIOs
that domestic customers were not a focus area for IT service providers and
that the IT service providers rarely offer Indian customers the kind of
commitment and expertise that they provide their large (and necessarily more
lucrative) global customers. The CIOs also strongly
believe that the potential of the domestic market is still not appreciated by
many of the IT services players. Further,
there continues to be a relative poor awareness of the potential of using IT
as an enabler of competitive advantage. As cost arbitrage is not a strong
enough justification for outsourcing in IT services vendors should be able to assist the CIOs to focus on generating business value from IT
investments, by offering total solutions and end-to-end services. As the level of IT investment increases, there is a change in the
perceived role of IT from a support function to an enabler of competitive
advantage. There is increasing pressure on the CIO(s) to justify the IT
investment by demonstrating the value delivered from IT investments. The
increased expectations from IT, requires them to move from routine IT
operations to strategic IT management. The challenges they face in making
this transformation has to do with the existing complexities in their IT
environments, which make the IT departments and the CIOs
spend most of their time and effort in day-to-day operations. The IT services vendors have a key role to play in helping the CIOs make this transformation. New offerings and service
delivery models need to be developed that can assist the CIOs
in streamlining their IT operations to such a level that they can then devote
their IT investments and efforts to transformational initiatives. Verticalised solutions are becoming increasingly
important, and IT service vendors need to develop domain skills and
offerings. Verticalisation of IT services is a definitive emerging
trend and users are demanding services tailored to their needs. Mature IT
customers are today looking for total solutions that can solve their business
challenges rather than at IT hardware, software, and services as discrete
elements. IT vendors today, need to develop new or customize existing
offerings to address the specific needs of each vertical/market segment. Such
an approach, based on solution-orientation, is enabling IT service providers
to offer sustainable value to customers. While the larger services vendors have specific vertical
practices and teams, the medium- and small-sized IT services vendors need to
focus on select verticals and develop their skills in these. Service providers need to extend strong end-to-end service
capabilities to domestic customers, as the IT services market moves to
high-value, annuity engagements. The evolution of the IT services landscape is defined by the
market graduating from low-value long-term services (such as basic
maintenance and support) to high-value one-time services (such as system
integration) and then on to high-value long-term services (such as discrete
and end-to-end IT outsourcing). The vendors who will gain from this shift are those who will
have the capability to offer end-to-end services. The transformation that is needed Larger and mature IT users are increasingly looking for
end-to-end IT services and this will be a major growth engine for the market.
This market segment will be dominated by a few large IT services vendors who
have the size and the capabilities to address this demand. The
development of the domestic IT services market will need to become more
broad-based. To achieve sustained development, new verticals will need to be penetrated
as it is not sufficient to increase business from only the currently
addressed verticals. A
large proportion of the current IT services market is predicated on the
banking, financial services and telecom verticals. While IT services for
these verticals will continue to show strong growth, new verticals will need
to be developed to increase the rate of growth of the IT services market in As
the Indian economy opens further opens up, other verticals including
manufacturing, travel and tourism, healthcare, entertainment will
increasingly look towards IT to increase competitiveness. For both new and
existing verticals, the small and medium business (SMB) segment will
represent an important source of growth for the domestic IT services market. 2007
was a year of continued growth for the technology and related services
sector, with the worldwide spending aggregate estimated to reach nearly USD
1.7 trillion, a growth of 7.3 per cent over the previous year. Global market ·
Software and
services continue to lead, accounting for over USD 1.2 trillion – over 71 per
cent of the total spend in 2007 ·
Hardware
spends, at USD 478 billion, accounted for over 28 per cent of the worldwide
technology spending aggregate in 2007 Indian Market ·
Underlying the
sustained growth were a range of economic, regulatory and demographic drivers
– including a continued emphasis on trimming operational costs, dealing with
increasing compliance and regulatory requirements, remaining price
competitive, transforming into a global services oriented business model and
addressing challenges of rising skill shortages, across several developed
markets ·
Strong optimism
of the industry to achieve its aspired target of USD 60 billion in exports by
2010 4.
Industry Performance
IT-BPO
Industry - Sector-wise revenue break-up
Note: Figures may not add up due to
rounding off. Source: NASSCOM IT software and services market IT
software and services market in IT Enabled services (ITES)/ The
Indian ITES- Compared to other competing ITES nations such as The Indian ITES/ ·
·
·
The strong
quality orientation of Indian ITES players ·
The strong
cost/value proposition associated with outsourcing non-core processes to ·
·
The presence of
a regulatory environment that’s conducive to the growth of the ITES market Some of the key ITES services lines include: ·
Back office
operations ·
Call Centres ·
Content
Development/Animation ·
Geographic
Information System Services ·
Medical
Transcription ·
Web site
services ·
Data Processing 5. Information Technology in
Rajasthan Rajasthan has attracted an investment over Rs. 1000 crores in IT and
Electronics sector in over 60 projects. RIICO has extended financial
assistance of over Rs. 50 crs
to the sector. The turnover of this sector is over Rs.
1500 crores with export of over Rs.
203 crores. It is projected that by 2008, the
export from the State in IT and Electronics sector would be over Rs. 500 crs. The major
industries are Infosys State
Government accords very high priority to the development of Information
Technology in the State. Rajasthan Government and RIICO has
identified Information Technology (IT) and ITeS as
a thrust sector and is providing several incentives for proliferation of IT
& ITeS industries in the State. State
Govt. has taken many initiatives to implement IT and e-Governance in the
State such as IT policy, expansion of Lokmitra and Janmitra, development of State wide area network,
development of web sites of departments, computerisation
of activities of departments, most of district collect orate connected with
Secretariat through video conference facility, IT education in schools and
colleges etc. 6.
State
IT & ITeS Policy-2007
The
details can be seen on web site www:rajasthan.gov.in 7. Special land package by RIICO to IT
industries in IT Parks/designated IT zones
Now
the land allotment for setting up of various IT industries as defined below/ Institutes
will be made at the rate of development charges prevailing in the area. The
following entitled land rebate by way of reimbursement shall be allowed after
stipulated minimum fixed investment is actually made on the allotted plot
within the period stipulated for investment in the package. 1. Very Prestigious Investment -
in IT Software, ITES and IT Hardware - For the industry which is set up on the allotted plot by any
company with a minimum fixed investment of Rs. 10 crores or by a fortune 500 company, within a period of 3
years, entitled land rebate shall be @ 60% of the plot allotment rate. 2. Prestigious Investment - in IT
Software, ITES and IT Hardware -
For the industry which is set up on the allotted plot with a minimum
fixed investment of Rs. 1 crore
within a period of 3 years, entitled land rebate shall be @ 50% of the
allotment rate for the plot upto maximum of 5 acres
area. 3. General Investment - in IT
Software, ITES and IT Hardware -
For the industry which is set up on the allotted plot with a minimum
fixed investment of about Rs. 10 lacs per 500 sqm. land and Rs. 2 lac for every subsequent 100 sqm.
within a period of 3 years, entitled land rebate
shall be @ 25% of the allotment rate for the plot upto
maximum of 2000 sqm. area.
4. Advanced IT Institutes- For the institute which is set up on the allotted
plot with a minimum fixed investment of Rs. 5 crores within a period of 3 years, entitled land rebate
shall be @ 25% of the allotment rate for the plot upto
maximum of 5 acres area. Advanced IT
Institutes would mean institutes offering exclusive IT courses atleast of the level of MCA /BE / M.Tech
(IT) /MBA (IT) / 5. General Computer Training
Institutes- No rebate in the
allotment rate shall be allowed. However, RIICO may consider land allotment upto maximum of 2000 sqm. on prevailing rate provided unit makes fixed investment of
about Rs. 5 lacs per 500 sqm. land within 3 years period.
Notes- ·
Production
activities will need to be started within three years from the date of
possession or from the date of lease deed execution, whichever is earlier. ·
The minimum
fixed investment should be made within 3 years from the date of possession or
from the date of lease deed execution, whichever is earlier. ·
An undertaking
/ certificate shall also be submitted by IT unit every year for the use of
land for the purpose the land is allotted. ·
Fixed
investment shall mean investment in land, building, computers, printers,
scanners, plotters, licensed software’s, EPABX, networking equipment, ·
In case of
failure to observe the terms and conditions regarding investment and time
schedule mentioned in the package, the concessional
amount shall be recovered from allottee with
interest from the date on which concession amount has been reimbursed. ·
In each case
the decision of RIICO shall be final as to what qualifies as IT Industry/
Institute for the purpose of above said incentive. ·
For
reimbursement of the concessional amount, the plot allottee would be required to inform RIICO office by a
registered AD letter sent prior to the scheduled date regarding the building
construction. After verification by the Unit Head, the Cheque
or rejection letter, as the case may be, will be sent by RIICO within 30 days
by registered AD letter. Definitions of IT Industry a) IT Software /ITES
Industry:- This would mean development and production of
computer software and IT Enabled Services (ITES) such as Call Centres, Medical Transcriptions, BPOs,
Content development, E-commerce and other similar activities. b) IT Hardware Industry:- IT hardware industry would mean production and
assembling of computers, peripherals, Computer Monitors, Printers, Scanners,
Modems, Hubs, Switches, Routers, Networking equipment's, 8. Concessions &
facilities available under ‘STP’ scheme to Software Development Units
9. A few important projects operating
in IT and Electronics in Rajasthan are as follows:- ·
Genpact ·
Infosys ·
Ericsson
Telecommunication Ltd. ·
Electrolux Kelvinator ·
Metacube ·
Compucom Software ·
Natural
Software ·
BIPS ·
Data Infosys ·
VGL Software ·
Lipi Data System Ltd. ·
Allied
Electronics & Magnetics Ltd. ·
A3logics ·
Natural
Technologies ·
True Worth ·
Back Office IT
Solutions ·
Pratham Software ·
Instrumentation
Ltd. ·
Cyber Futuristics (I) Pvt. Ltd. ·
Compact Disc
India Limited ·
Dibon Solutions Private
Limited 10.
Infrastructure I. IT Infrastructure at Jaipur a) High Speed Data
Communication The high-speed data
communication facility is available through following sources i.e. ·
STPI Earth
Station ·
VSNL
International Gateway ·
BSNL ·
Bharati ·
Reliance ·
Air Tel ·
Hutch ·
TATA The telephone
communication are available through BSNL as well as though private service
providers. Mobile services are being provided by Airtel,
Hutch, BSNL, Reliance, Idea,TATA
etc. b) Dedicated IT
Park in a Developed Industrial Area The IT Park is
situated in an existing ·
This park is on
National Highway No. 12, located at about 5 Kms.
from Airport and 12 Kms.
from the city centre. ·
The park has got
developed plots ranging 500 Sq.mtr to 2000 Sq.mtr. ·
The IT Park has
got multistoried complexes, where space is available on license (rent). The
building has got high speed data communication; telecom facility, security
etc. The built-up modules are available in multiple of 1000 Sq. Ft. Ready to
use facility is also available. ·
Ample quantity
of water and adequate Power is available for industries in the area. ·
Good transport
facility connecting the park to the city is available. ·
Rajasthan
Housing Board has developed a large Housing Colony at a distance of about 2 Kms. from the IT Park. The houses in the area are easily
available on rent as well as on outright purchase. ·
Some large
industrial units already in operation in the area include Mico
Bosh, Genus Overseas, ·
There exist a conducive working environment in the Industrial
Area. c. Skilled Manpower The following Institutes of National repute are
offering graduate & post graduate courses in IT ·
Malviya National
Institute of Technology, Jaipur ·
LNM
Institute of Information Technology, Jaipur ·
·
BITS ·
4 other
Private Universities ·
AMITY ·
ICFAI ·
Compucom ·
Other
Private Engineering Colleges (40 in numbers) ·
Other IT
Institutes
d. Advantages of Jaipur
Jaipur is an ideal location for setting up a Software
Development Centre as : ·
High Speed Data
Communication ( ·
Skilled
manpower easily available. ·
An IT Park is
operational in Export Promotion Industrial Park (EPIP). ·
STPI, Govt. of
India office is located for single window services under "STP"
Scheme & data com facility. ·
New IT policy
is in place. ·
Running cost in
terms of wages payable to Professionals is moderate in comparison to other
cities. ·
Jaipur is well connected
with all Metropolitan Cities by Air, Rail and Road. ·
An ·
Law & order
situation is excellent. ·
No Power cut. e.
Social Infrastructure in Jaipur•
II. IT park at Kota An IT Park in an area about 7 acres has been set up
at Indraprastha Industrial Area, The Internet can be availed from BSNL or private
ISPs. Telecom infrastructure in terms of basic, mobile and value added
services are available. Broad gauge connection with all major cities like, Educational institutes such as University,
Engineering colleges, Medical college, Poly technique college, Computer
training institutes are located in the city to cater to the need of skilled
manpower. RIICO cyber
park in an area about 5.5 acres is being setup at Heavy Industrial area, RIICO in association with Software Technology Parks
of India, (STPI) has set up an Earth Station with incubation facility at An IT Park in an area about 30 acres is also being
setup at Boranada, Broad gauge connection with all major cities like, Educational institutes such as Engineering college,
Poly-technique college, Computer training institutes are located in the city
to cater to the need of skilled manpower. IV. IT park at Udaipur To meet the
growing demand of IT industry, RIICO has planned a new Information Technology
(IT) Park in an area of about 10 acres at The total number of plots in IT Park is 38 only. The
park has got developed plots ranging 500 Sq.mtr to
2000 Sq.mtr. Developed infrastructure facilities such as power,
telecom, roads, drainages etc. are being provided in the IT Park. The Internet and leased circuit can be availed from
BSNL or private ISPs. Telecom infrastructure in terms of basic, mobile and
value added services are available. Educational institutes such as University,
Engineering colleges, Medical college, Poly technique college, Computer
training institutes are located in the city to cater to the need of skilled
manpower. Air, Rail & Road connection with all major
cities in the country. 11.
Concessions to IT units in designated IT Parks- At a
glance ·
Land rebate upto 60% depending upon type & size of investment ·
50% Exemption
of Stamp Duty on registration of land ·
50% Exemption
from electricity duty for 7 years ·
Simplified Labour Laws. (women are allowed
to work in night shift, self certification under various State enactment's
etc.) ·
Electric Power
on priority. ·
Customised package for
Investment beyond Rs.10 crores. ·
Venture Capital
(on merits) by RVCF. For details, please
contact: Alok Kumar, General Manager (BP) RIICO Limited, Udyog Bhawan, Tilak Marg, Jaipur
-302005. Tel. No.: 0141-
2227751 OR 5113234 (D) Fax No.: 0141-5104804 Email: alokkumar@riico.co.in |
