Industrial parks conversion into IT parks to further boost Hyderabad

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IT parks.
IT parks.

Despite the economic slowdown caused by the Covid-19 pandemic, Telangana is focusing on expansion of information technology sector to further strengthen its standing as a leading global technology destination.

It is not only setting up IT parks in tier-II cities but within Hyderabad, it is taking up initiatives to ensure expansion of the sector in all corners of the city.

For over two decades, the IT presence in Hyderabad was confined to Madhapur and Gachibowli clusters in western part of the city and it is only in recent years that few companies started their operations in the east.

The state government has now drawn up ambitious plans to take the IT growth to all corners of the city.

Under the GRID (Growth in Dispersion) policy of the state government, as many as 11 industrial parks within Outer Ring Road (ORR) limits will soon be converted into IT parks. This week, the authorities issued detailed guidelines pertaining to the zones, incentives and government support for the conversion.

The IT towers will come up in industrial parks at Balanagar, Kukatpally, Moula Ali, Mallapur, Patancheru, Katedan and Sanatnagar, covering all corners of the city excluding the west.

This followed the government’s order to all polluting industries within the ORR to shift outside it. Non-polluting industries were also given the option to shift.

Officials say the conversion of industrial parks into IT Parks will improve the elevation and the quality of living in the city.

Home to 1,500 IT/ITES companies including global majors Microsoft, Google, Facebook, Apple, Amazon, and nearly six lakh employees, Hyderabad is recognised as one of the leading Information Technology hubs globally.

The new initiatives including GRID are expected to help achieve the state government’s vision to increase the IT exports to $25 billion (Rs 1,87,000 crore) by 2025.

The officials said the government embarked on dispersion as there is resurgence of interest among the global investors community, due to the state’s investor friendly and proactive policy measures.

It is estimated that, about 30 per cent of the IT talent pool resides in eastern part of the city and commutes to western IT Corridor on a daily basis. Similarly, a large part of the IT workforce resides in the northern parts of the city including Kompally, Bahadurpally, Bachupally and Dundigal. This has led to overall city congestion and increase in commuting time for the IT employees.

Dispersing the IT sector will not only decongest the western corridor and reduce the infrastructural burden, but also makes it convenient for IT workforce to commute to work and reduce the transportation burden on the IT companies.

This is part of the objective to make Hyderabad the most preferred technology investment destination in the country and to attract niche segments which are fast emerging and evolving new verticals in technology sectors.

The IT, Electronics and Communications Department has announced various incentives for units, anchors, developers, infrastructure development and institutional measures and branding and promotional activities.

The IT and ITeS units coming up in the industrial parks would be eligible for GRID benefits like an additional power subsidy of Rs 2 per unit on the industrial power tariff on a reimbursement basis for a period of five years, with the total incentive for the unit not exceeding Rs 5 lakh per year.

According to the Government Order, the units will also get a lease rental subsidy of 30 per cent for a period of five years with the total subsidy for the unit not exceeding Rs 10 lakh per year.

The department announced concessions on land conversion for industrial lands under the Telangana State Industrial Infrastructure Corporation (TSIIC) or industrial area local authorities that are converted to IT or ITES use.

The developer has to utilise a minimum of 50 of the total built up area towards IT purpose. The remaining 50 per cent can be utilized for non-IT use including commercial and residential use.

In addition to converting industrial parks into IT parks, the government will also build an IT park at Kompally in the northern part of the city and another facility at at Kollur or Osmannagar in the north-western part of the city.

The government chosen the areas for creating IT parks based on representations from various players.

The eastern part of the city already has NSL IT Park, Genpact, Infosys and others.

Minister for Information Technology and Industry K. T. Rama Rao in July announced that the government permitted conversion of five industrial parks into IT parks in east Hyderabad.

In these five parks, IT firms will be set in about 25 lakh square feet which will create employment opportunities to 30,000 employees.

He handed over conversion letters to the five companies. Hyderabad Distilleries and Wineries Limited’s IT park will come up at IDA-Uppal over 12.40 acres. Minacto Chem will set up another park in the same area over 2.66 acres.

Swamy Soaps and Oils Pvt Limited’s park will also come up in IDA-Uppal over 2 acres. Gokuldas Exports Ltd’s Mini Textile Park will set up IT park in Nacharam over 8.93 acres while Bakelite Hylam Limited’s facility will come up at IDA, Nacharam over 8 acres.

The minister says that Hyderabad has no geographical hurdles and has the scope to develop in all the corners.

Telangana clocked over Rs 1.28 lakh crore of IT exports during 2019-20, a growth of nearly 18 per cent over the previous year.

The growth rate was more than double the national average of 8.09 per cent and more than two-and-a-half times the rest of the nation’s average of 6.92 per cent.

The share of Telangana in overall IT exports from India went up from 10.61 per cent to 11.58 per cent.

The number of jobs in the IT sector in the state went up from 5,43,033 to 5,82,126, a growth of 7.20 per cent compared to national average of 4.93 per cent.

This growth was registered despite the onset of the Covid-19 during the last quarter of 2019-2020.

The Compounded Annual Growth Rate (CAGR) for IT exports for the last six years is 14.46 per cent.

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