If you think Bengaluru, Delhi and Pune are the only investment hotspots in the Indian IT or electronics system design and manufacturing (ESDM) sector, you are mistaken. Jharkhand is all set to grab your attention, thanks to the state government’s policies. In a recent interaction with Umesh Sah, director, Department of IT and E-Governance, government of Jharkhand, we got to know how well these policies have been implemented.
By Sreemoyee Chatterjee
While Jharkhand has not yet achieved prominence among the top IT and ESDM destinations of India, the state government is slowly gearing up to play a bigger role. With its two-year-old policies in place and some of them in the process of being implemented, Jharkhand’s Department of IT and E-Governance is making sure the state becomes one of the recognised hubs for IT, ESDM and startups, by the beginning of 2019.
EB: Could you shed some light on the policies of the states’s Department of IT and E-Governance?
In 2016, the Jharkhand state government announced four different policies – the IT and ITeS Policy, the BPO/BPM Policy, the ESDM Policy and the Startup Policy —all under the Department of IT and E-Governance. While these four policies have different aims and objectives, they do share a common goal. These policies aim to place Jharkhand on India’s IT, ESDM and startup map, at par with other leading cities like Bengaluru, New Delhi and Pune.
EB: What are the salient features and focus areas of Jharkhand’s IT and ITeS Policy?
The IT and ITeS or the Information Technology Enabled Service Policy aims to make Jharkhand a globally competitive IT and ITeS destination, by promoting a faster, sustainable investment environment, and fostering inclusive growth and employment in the state. We are aiming to promote Ranchi and other Tier-2 cities as alternative IT destinations, and offer quality IT infrastructure to all Tier-2 and Tier-3 cities in the state. This policy also focuses on the setting up of IT infrastructure like IT parks, IT special economic zones (SEZs), IT cities, etc, thereby efficiently contributing to the IT industry as well as improving the lives of citizens in the state.
EB: Do tell us about how the IT and ITeS Policy is being implemented, on the ground. Has there been any improvement in the level of business?
Although the policy is at a nascent stage and is just two years old, we have started receiving an amazing response from several companies. As good IT companies need more space, manpower and quality infrastructure, we are preparing the state to meet all these demands. The companies, too, are eager to build their own infrastructure in Jharkhand. The state’s Software Technology Power Building (STPB) has already accommodated a couple of companies. Around ten to 15 IT companies will start business in Jharkhand by the end of this year.
It is too early to talk about improvements in business. All we can say is while earlier there was almost no business at all in the IT and ITeS sector, now business has begun and very soon we will have a promising turnover.
EB: What about the ESDM Policy of your state? Will it help improve India’s ESDM sector?
We consider our ESDM Policy to be the most important among the four, as it is designed to play an important role in improving the overall ESDM sector in India, which needs a lot more attention at present. The objectives of this policy include starting at least 50 units for ESDM assembly or manufacture in Jharkhand in the next decade, and building a strong supply chain for raw materials, parts and electronic components in order to boost local manufacturing, as well as to facilitate the export of ESDM goods from the state. All this combined will contribute around US$ 2 billion to the country’s export target of US$ 80 billion by 2020.
Protecting intellectual priority rights through reforms, reducing patent litigation while enhancing trade secret protection, increasing the availability of skilled and semi-skilled manpower via apprenticeships, and special vocational training in ESDM assembly are among the other aims of this policy. Under this policy, the Jharkhand government is providing subsidised land and power to manufacturing companies. To increase employment in the state, we are offering up to ₹ 20,000 in reimbursement for every Jharkhand resident employed by a company.
EB: How successfully has Jharkhand’s ESDM Policy been implemented in the last two years?
Although we have not received much response from new companies in the ESDM sector, several established companies have shown a keen interest to set up manufacturing units in Jharkhand to avail the advantages of our ESDM Policy. We are creating an electronics manufacturing cluster in Jamshedpur, for which the policy has dedicated an area of 92,903sqm. Work on this is going on and is expected to get over by the end of this year.
Fifteen to twenty companies from abroad will be accommodated in this cluster. They will be manufacturing electronic chips and will supervise and train Indians on making our own chips. These companies are willing to create and extend their market from their Jharkhand base to the eastern and north-eastern states of our country, which till now have been under-explored with regard to their ESDM sector potential. Also, we already have four Jharkhand based companies with branches in the US and Europe that will extend their units in the new cluster. Although we do not treat new and established companies differently, the well-known names are attracting the new companies into Jharkhand.
EB: Has there been any improvement in the annual turnover of the ESDM sector in Jharkhand since the policy’s implementation?
Two to three companies have started their business in the field of product design. However, manufacturing has not begun yet as it requires more space as well as higher tech infrastructure, which will take some time to fall into place. Interestingly, we have had an annual turnover of ₹ 100 to ₹ 150 million already, which is pretty decent, for a start.
EB: Let us know more about the Startup Policy of Jharkhand
Just as cities like Bengaluru and Delhi have done very well in the startup space, we would like to see Jharkhand do the same. Our Startup Policy aims to provide an area of 9,290sqm for an incubation space, with end-to-end support to the startups in the state. The policy also plans to create a fund of funds (FOF) via public-private-partnership (PPP) to promote these startups. This will facilitate the setting up of at least 100 startups based on new technologies catering to the social and other needs of the state. It will also help to promote a robust academia-industry connecting platform and encourage entrepreneurship in educational institutions across the state on a wide scale.
EB: How much of the Startup Policy has been implemented already?
Under this policy, we are preparing Jharkhand to provide both financial and mentoring support to startups willing to establish their base in our state. While we have come up with the Jharkhand Innovation Lab with the support of IIM, Ahmedabad, to back new startups, we have also realised that this whole startup culture and concept is very new for our state as, till now, mostly young firms in the bigger cities have tried their hand at it.
We do not have enough experience on how to improve and modify the startup model. The startup ecosystem is at its infancy but is gradually picking up. We have received 40 to 50 startup ideas from several groups. While some have been approved, others are awaiting approvals from the state government. We are planning to build a startup hub in Ranchi, and to help institutes promote an entrepreneurial culture within their respective campuses. We are confident that very soon Jharkhand too will become one of the reputed destinations for investments in startups.
EB: Are these policies helping Jharkhand to turn some of its cities into smart ones?
A smart city needs smart equipment, mainly IoT devices. However, these devices are not manufactured in Jharkhand, yet. That is why we are focusing specifically on startups willing to work on IoT devices, services and solutions. Some of the IoT based startups have shown interest in this and have already applied for an IoT hub or centre in the state. Although this has not yet materialised, we are in discussions with such firms. However, it is taking some time to convince IoT based startups to invest in Jharkhand as, for them, Bengaluru, Delhi and Pune are their first choices.
EB: Are you planning to come up with an IoT Policy as well?
We have framed an IoT Policy to improve the ecosystem and promote IoT based companies. However, it is still at the discussion stage and the draft has been circulated among various stakeholders for final approval.
