Answering a question in the Lok Sabha, on April 6, 2022, the Union government revealed that 22 new Software Technology Parks of India (STPIs) have been sanctioned for tier-2 and tier-3 towns in India. While towns from nearly 12 states across the country were shortlisted, none from India’s youngest state – Telangana – made it to the coveted list. This bolstered the already existing allegations of disparity and injustice towards Telangana by the Union Government, levelled by CM KCR and other TRS leaders.
Five STPIs have been sanctioned in Odisha, three each in Uttar Pradesh and Jharkhand, two each in Madhya Pradesh and Bihar and one each in Punjab, Kerala, Arunachal Pradesh, Haryana, Gujarat, Karnataka and Himachal Pradesh. Rajeev Chandrasekhar, Minister of State for Skill Development and Entrepreneurship of India, revealed this information while answering a question posed by Lok Sabha MP Chandan Singh.
Ten days after this revelation, on April 16, 2022, Telangana IT minister KT Rama Rao, popularly known as KTR, wrote to the Union Electronics and IT Minister Ashwini Vaishnaw regarding the establishment of new STPIs. Minister KTR in his letter reminded the Union minister how the Information Technology Investment Region (ITIR), an IT investment region that was to be jointly developed by the Union government and the state government, was initially sanctioned but eventually withdrawn. He mentioned in the letter, “The Union government has already done a great disservice to the youngsters of Telangana by withdrawing the Information Technology Investment Region (ITIR), which was sanctioned to Hyderabad by the erstwhile UPA government… In the current instance too, the Union government seems to have ignored a performing state like Telangana in sanctioning new Software Technology Parks of India.”
The letter also urged the Union minister to sanction new STPIs to tier-2 and tier-3 towns of Telangana like Nizamabad, Nalgonda, Khammam, and Mahbubnagar. KTR wrote in the letter, “Such a measure will provide the much-needed fillip to the IT sector in the state and also lead to the generation of abundant employment opportunities to youngsters of Telangana.”
An STPI was sanctioned in Hyderabad in 1991, and an office for the same was set up in Hyderabad’s Ameerpet in 1992. Back then, there was hardly any presence of IT companies in Hyderabad. The STPI was important because it helped get all the required licenses for startups.
Another one was sanctioned in 2001 in Warangal. So why is Telangana concerned that the Union government has not sanctioned new any STPI in the state? Some of the benefits and highlights of STPIs include approvals that are given in a single-window clearance system, and jurisdictional STPI authorities can clear projects costing less than Rs 100 million with Indian investment. All imports of hardware and software in STPI units are completely duty-free, and import of second-hand capital goods are also permitted. Companies in STPIs also get a 100% depreciation on computers and computer peripherals over a period of five years.
STPIs come under the Ministry of Electronics and Information Technology (MeitY), and aspire to become the largest technology startup ecosystem in the country. By sanctioning STPIs, the Union government hopes to promote R&D, providing state-of-the-art infrastructure, skilling, mentoring, market connect, and other necessary support to startups. Since its inception in 1991 with three STPIs, the ecosystem has now grown to 62 centres; out of which 54 are in tier-2 and tier-3 cities. Twenty-two new STPIs have now been sanctioned.
While minister KTR expressed his displeasure at STPIs not being pursued in the state, Jayesh Ranjan, Telangana IT Secretary, points out that there is no clarity on how STPIs are allocated.
Speaking to TNM, the IT Secretary said, “I am not sure how decisions to allot STPIs are taken. States are not a party to it. It is possible that states like Karnataka, Telangana, etc. that already have an IT base have been left out.”
Jayesh says that Hyderabad doesn’t really need an STPI, but other places in Telangana do. “Frankly, Hyderabad doesn’t require an STPI because today, companies are coming by themselves. That may be a reason why the Union government didn’t allot an STPI [for the city]. But they should be aware that there are several smaller towns in Telangana where the state government is very keen to promote IT. The state’s own IT policy- first and second policy speaks about it.”
“Whether STPI is set up or not, the state government has started setting up IT towers, reaching out to potential companies. Be it in Karimnagar, Khammam, or Nizamabad, even if there is no STPI sanctioned, the state government continues its work without lamenting about not having an STPI,” he added.
According to senior sources in the IT Department, today, Karimnagar has one IT tower, as does Khammam, along with another in the pipeline. Nizamabad too has an IT tower. Meanwhile, in Nalgonda, Siddipet, and Mahabubnagar, the foundation stones have been laid and work is underway. Speaking to TNM, a source from the Department, on the condition of anonymity, said, “Which state has the presence of IT companies in so many tier-2 and tier-3 cities? Ideally, the Union government should have asked states to nominate towns, and from the nominations, they could have shortlisted the places to build STPIs. If the state government can plan and come up with a textile park, a pharma city etc., can’t the Union government do the same? Without the help of the Union government, if Telangana can achieve so much, imagine how much could have been achieved with their support.”
When asked what exactly would have Telangana gotten if an STPI was sanctioned anywhere in the state, the IT Secretary said, “An office would have been set up by STPI. Companies would have been given plug-and-play space, free internet, and other facilities. If Karimnagar would have been sanctioned an STPI, whatever STPI would have done, the state government has already gone ahead and done. A 50,000 sq feet IT tower has been built and there are plans to expand this. A lot of subsidies have already been extended from the state budget to the companies.”
“An ITIR was also sanctioned to Telangana but it was eventually withdrawn. This didn’t slow down the state’s progress at all. We actually achieved much more than we would have done under ITIR. The state government has its own priorities, and having an ITIR, or having or not having an STPI, doesn't make a difference to the state’s own priorities and its own determination to implement the priorities,” added Jayesh Ranjan.
He further points out that the state’s own initiatives have spurred its IT sector. “Companies never say that if there is no STPI we will not invest in a place. If this was the case, then companies wouldn’t set up offices in Khammam and Karimnagar. Today, despite not being in an STPI, the respective IT towers in both Khammam and Karimnagar are completely packed,” he said.