By Devasis Sarangi
I diverted my energies to consulting as profession and pre- primary education and art, culture & heritage as passion, and many thought I had gone mad. I was associated with a leading player in the sunrise sector, Information Technology a few years back (after my long stint with a leading player in the traditional sector, Banking). The going was great and we were the darling of any industry, be real estate or banking and I even remember getting a house loan at as low as 7.25% fixed rate!!!
Recently, heard the news, in a leading business daily, Odisha Government has been following up hard, of late, in developing the IT infrastructure of the State by developing an Information Technology Investment Region (ITIR) in outskirts of Bhubaneswar.
I have several family members and friends in the IT sector both as entrepreneurs and employees and this prompted me to think.
Way back in 2008, Department of Information Technology had approved a policy resolution to set up ITIRs in different States which by it I think, was a late policy. The IT services sector then in the decade or so to about 2007, the US dollar revenues were growing by anywhere between 30% and 45% a year. For almost a whole generation for young men and women entering the urban employment market, IT services has been the great safety valve.
Then the first big decline in 2009 happened when growth dropped to single digits. After that, there was some recovery but the original pace was never achieved again. Now, even the rosiest predictions for growth rates barely break out above 10%.
Of course, there are many reasons for this; but the fact remains that whether from the perspective of investors or insiders, the ground has moved out from beneath the IT services industry. The original animal spirits industry that played the starring role in what we love to call the 'Indian Story'.
Bhubaneswar ITIR, which never took off then, is now expecting to generate direct employment for 2.37 lakh people and indirect employment for 7.11 lakh, to be completed in two phases by 2030. Rs 12,145 crore in public-private-partnership (PPP) projects is what has been projected and in the next phase is a plan to develop an international airport, set up power transmission, upgrade the road link NH-5, set up a rapid bus transit system and social infrastructure - including an IIIT - with a total investment of Rs 4,000 crore. The Info Valley Project, which is a 500-acre IT SEZ and an integrated township, is the anchor tenant for the ITIR-Bhubaneswar. Infosys has been allotted 50 acres for an IT SEZ and inducted as co-developer of the Info Valley Project.
Now there's a huge difference between the downstream effect of an employment intensive industry that grows at 40% a year and one that grows at 8% or 10%.
The constantly increasing workforce, with constantly increasing pay cheques and a constant predilection to spend — it was a wonderful combination while it last-ed. However, that was then. Make no mistake, an era is over — that kind of growth is not coming back. In some ways, this is also a story of opportunities missed.
“Has Odisha then not missed the IT growth era and taking a step too late?”
While the move to have an investment region earmarked is a welcome one, restricting its major use only for IT services & ITES may not be wise at this juncture.
(The author can be reached at firstname.lastname@example.org)