It is touted to be one of the 100 fastest-growing cities in the world and the second largest in the present state, but Visakhapatnam is yet to become a brand by itself in the information technology sector. Now that the state is divided and Vizag is the biggest city in Seemandhra with all possibility of having its own IT Investment Region (ITIR), it is expected to discover new horizons but only when the government provides adequate support and promotes IT investments.
For over a decade, Vizag has been home to IT sector in this region. Despite its initial growth, the city has got stuck in the middle of IT development following the global recession in 2008 and the projects are not so encouraging for the city-based firms. The city has not witnessed any multinational company setting up its unit here and nearly 75 per cent of the 4 lakh sft built-up area developed by the IT firms at Rushikonda IT Special Economic Zone (SEZ) is lying unutilised. Though Tech Mahindra and Wipro have started operations, they are running only support systems but not full-fledged software development operations.
“Only a handful of the entrepreneurs from the region established small and medium firms that cater to about `2,000 crore IT exports per annum. This is just three per cent of the IT business in Hyderabad which is around `63,000 crore. But we foresee better growth in the wake of the state bifurcation. Ever since the central government firmed up its plans to bifurcate the state, we have received over 50 applications from various sectors including more than 10 applications for setting up or expansion of IT firms,” said an official of Andhra Pradesh Industrial Infrastructure Corporation (APIIC).
The APIIC official hopes that IT companies would show interest in establishing their units in Vizag as the government has identified about 9,000-acre land near Visakhapatnam for setting up the proposed Information Technology Investment Region (ITIR). Further, the government is also planning to promote animation and gaming industry with a slew of incentives to investors.
Though many senior officers in Vizag-based IT firms consider it very premature to predict on the future of Vizag as an IT destination in the coastal Andhra and Rayalaseema regions after the bifurcation of the state, they do not rule out the possibility considering its cosmopolitan culture, human resource, infrastructure and abundant land bank. According to them, the proposed IT Investment Region (ITIR) could be the biggest boost that the industry could get for promoting Vizag as an IT hub. While it remains much debatable whether multinational companies (MNCs) would choose Vizag as their IT destination, IT industrialists feel that the new government should come up with a fresh IT policy immediately after assuming power and promote ITIR which could provide the much needed boost for the city.
The Vizag ITIR will be implemented over a period of 25 years in two phases and after its commissioning, it is expected to provide direct employment to 4.28 lakh people and indirect employment to another 17.11 lakh people. The investment expected is `45,005 crore and revenues expected are `37,353 crore, when it is fully operational by 2038.
Rushikonda IT Park Association (RITPA) vice-president and Symbiosys Technologies chief executive officer O Naresh Kumar feels that there would be a definite effect on the IT industry in Visakhapatnam and presses for providing tax incentives for promoting the IT sector. “Vizag has the greatest potential, provided the government works on tax benefits and develops about one million sq ft to facilitate growth of the IT industry, along with creating infrastructure like air travel facility round-the-clock, and schools and hospitals of international standards,” he said.
Some multi-national companies reportedly firmed up their plans to expand their operations to be ahead of their competitors in the city. Sources said that an IT major which has been keeping its expansion pending for some time, is gearing up to expand the business by making them fully operational. The company, which is constructing a new building on its premises, has already asked its employees to relocate from Hyderabad to Visakhapatnam, apart from commencing the recruitment process to increase the workforce. Many buildings constructed in the Rushikonda area and in the heart of the city are expected to go fully operational soon as other companies finish redrafting their future plans.
Workforce will not be a problem to these firms as approximately 50 management and engineering colleges are available in and around Visakhapatnam. A majority of employees in IT firms at Hyderabad and Bangalore are from coastal Andhra, and this would be an opportunity to them to come back to Visakhapatnam and be closer home. L Radhakrishna, a HR manager working in a MNC at Hyderabad, emphasised the need to create a sense of secure career for drawing the techies back to Vizag. “The government has to promote IT firms in Vizag to encourage establishment of more companies and provide employment in Vizag,” he added.