Impact Evaluation Studies on STPI Scheme in Tier II and Tier III Cities Other than Metros - PowerPoint PPT Presentation

1 / 31
About This Presentation

Impact Evaluation Studies on STPI Scheme in Tier II and Tier III Cities Other than Metros


Software Technology Parks of India (STPI) a Autonomous Society under Dept of IT ... Gujarat IT fund under the aegis of Gujarat Venture Finance Ltd set up. Gujarat. 6 ... – PowerPoint PPT presentation

Number of Views:278
Avg rating:3.0/5.0
Slides: 32
Provided by: Fro18


Transcript and Presenter's Notes

Title: Impact Evaluation Studies on STPI Scheme in Tier II and Tier III Cities Other than Metros

Impact Evaluation Studies on STPI Scheme in Tier
II and Tier III Cities (Other than Metros)

Developed for Software Technology Parks of India
Objectives of the study
  • Software Technology Parks of India (STPI) a
    Autonomous Society under Dept of IT was set up in
    1991 to implement Software Technology Park (STP)
    Scheme and Electronics Hardware Technology Park
    (EHTP) and also to provide High Speed Data
    Communication to software exports. Apart from
    Statutory and datacom services, STPI has been
    providing incubation facilities for software
    exports, specifically to SMEs and start up units.
  • The objectives of the study are
  • Assess the impact of STPI scheme on the overall
    development of IT Industry and its impact on
    Indian economy
  • Identify Tier II and Tier III cities that can
    be engines of growth for future IT products and
    services in India
  • Identify SME IT industrys growth, the
    challenges and constraints
  • Suggest appropriate policies to sustain the high
    growth of Indian IT and ITes Industry

IT Industry
In crores
  • India accounts for 65 percent of the global
    market in offshore IT 46 percent of the ITeS
  • Total export revenues earned by IT-ITeS sector
    in 2006-07INR 161,925 crores

Indias GDP and the IT sector
Growth of Indian Software Industry
Indias GDP and IT sector contribution
  • IT sector contribution as a of GDP has been
    rising YOY, from 1.2 in 1997-98 to about 5.4 in

Rs billion
Indias GDP and the IT sector
  • Sustained Economic growth, Positioned as the
    fourth largest economy with a PPP of 3,062.
  • Developed Banking system moving rapidly towards
    ICT integrated core banking/net banking

Growth of Indias GDP and the IT sector
Growth rate
Source Ministry of Statistics Programme
Implementation, NASSCOM, Central Statistical
Organization and Frost and Sullivan Analysis
STPI Scheme Some Performance Indicators
  • The STPI with its 49 centres, has crossed
    Rs.1,00000-crore IT exports (Rs.1,00,965 crore
    during 2005-06 as compared with 74,019 crore last
  • Has been a major contributor for spreading the
    IT industry development across India.
  • A total number of 7688 units were approved and
    5116 units were exporting in FY 2005-06.
  • More than 5,00,000 sq.ft of space available with
    STPI across the country for the incubation

Source STPI
  • Net exports earnings by STPI units in 2005-06
    INR 101,090 crores. Share of STPI units of export
    revenues earned by IT-ITeS sector in 2005-06 -
    96.7 percent
  • More than 80 of the STPI members units are
    Small and Medium Enterprises (SME).
  • Direct manpower employed by the exports segment
    of the Indian IT-ITeS sector in 2005-06 920,000
  • Share of around 4000 emerging players (SMEs) in
    the IT Services domain having revenues less than
    USD 100 million 10 to15 of total IT Services
    export revenues.
  • Share of emerging players (SMEs) in BPO having
    revenues less than USD 10 million 5 of total
    ITeS export revenues. Estimated global spending
    in IT-ITeS in 2005 Over US 1 trillion
  • Share of Indian IT-ITeS exports of the total
    global spend on IT-ITeS in 2005-06 less than
    2.5 percent

Impact of the STPI scheme
  • Definition of Tier II Tier III cities
  • Tier II Tier III cities are non-metro cities
    endowed with sufficient human, natural, and
    infrastructural resources required to grow and
    sustain ICT development in India.
  • The difference between the Tier II Tier III
    cities is with respect to the quality of social,
    economic and IT environments.
  • The next slides detail the social, economic IT
    environments that are used to identify potential
    Tier II Tier III cities.

Identification of Tier II and Tier III Cities
  • Identification of Tier II and III cities
  • In this study, we attempted to identify Tier II
    and Tier III cities based on two approaches
  • Scoring model where weights are assigned for
    primary data of economic, social IT factors
    related to a city to identify high total score
    and low total score Cities
  • Discriminant Analysis Based the social, economic
    and IT factors use a standardized discriminant
    analysis to identify the groups (i.e., Tier II
    and Tier III cities) and also discriminating
    variables (what differentiates between Tier II
    Tier III Cities).


Scoring Model Parameters of assessment
  • City Population
  • Youth Population
  • Number of Literates
  • HDI Index
  • Law and Order
  • Broadband penetration
  • Tele density
  • E Readiness Index
  • Number of Engineering Colleges
  • Degree Colleges and Universities
  • Number of Schools in the city
  • Number of Industries in the City
  • Number of IT industries in the city
  • Air Connectivity to other cities
  • Number of Banks
  • Proximity to SEZ

STPI Cities Tier II III
Srinagar Durgapur Bhilai Imphal Kharagpur Jodhpur
Kanpur Aurangabad Nashik LucknowShimla Trichy Pon
Non-STPI Cities
Ajmer Gulbarga Kota Bhiwandi Aligarh Bareilly Ujja
in Firozabad Bokaro Bikaner Agartala
Amravati Ghaziabad Patna Rajkot Kozhikode Raipur B
havnagar Jamshedpur Sangli Gwalior Cuttack
Large, Medium, and Small STPI Units
  • In India, majority of the exporting units have
    been SMEs, which contribute 73 to the export
    earnings. SMEs constitute 99.48 to the total IT
    exporting units in India. Of these roughly 83.49
    are small enterprises with revenues less than
    INR10 Crores, while the remaining are medium
    sized enterprises with revenues between INR 10
    and 100 crores

Exporting Units
Share of exports by Large units SME
  • Small Medium sized units contributed around
    27 of the IT exports, which is about INR 30634
    Crores, in 2005-06.
  • Large units, inspite of being less that 1 of
    the total exporting units, contribute to 73 of
    the exports from India.

Source STPI

Contribution of SMEs to the National IT-ITeS
Exports (2007-08 to 2011-12)
SME Contribution
  • Currently SMEs are growing at 17 p.a. At this
    rate the exports are estimated to reach 1,24,039
    crores by 2012 ,creating direct IT employment of

INR Crores
IT Employment generated in SME
No of employees
Source Frost Sullivan
Estimated Share of IT-ITeS SMEs towards the
National Exports
Share of SMEs in National IT ITeS Exports up to
2011 2012
  • At the current growth rate of SMEs and Large
    enterprises, the percentage share of Non-SMEs to
    national exports will continue to increase by
    2012. The share of non SMEs is expected to grow
    from 52.1 of the national exports to 67 of the
    national exports and subsequently, the share of
    SMEs will fall, from contributing to 47.9 in
    2005-06 to 33 of national exports in 2011-12.

Percentage Contribution
Source STPI, and the 11th Five Year Plan
(2007-20012) Working Group on Information
Competitive analysis External Internal
  • The current phase began in 1991 with the launch
    of the IT2000 masterplan. Singapore is to be
    transformed into an intelligent island, where IT
    permeates every aspect of the society - at home,
    work, and play.
  • Intelligent Nation 2015 (iN2015) is Singapores
    10-year masterplan to help realize the potential
    of infocomm over the next decade. Led by the
    Infocomm Development Authority of Singapore
    (IDA), iN2015 is a multi-agency effort that is
    the result of private, public and people sector
  • Civil Service Computerization Program (CSCP)
    setting important precedents for SMEs
    encouraging technology adoption, providing SMEs
    with opportunity to study new costly technology
    without having to commit investments of their
  • Small Enterprise Computerization Program (SECP)
    Small Enterprise Computerized Accounting
    Program (SECAP) aimed at attempting to synergize
    SMEs with ICT to upgrade their business

Policy Framework for SMEs in Singapore
Source International Development Association
Competitive analysis External Internal
  • Local Enterprise Computerization Program (LECP)
    allowing SMEs to gain access to a registered
    group of ICT consultants vendors, obtain
    assistance grants
  • To spearhead the transformation of key economic
    sectors, government and society through more
    sophisticated and innovative use of infocomm
  • To develop a globally competitive infocomm
  • To develop an infocomm-savvy workforce and
    globally competitive infocomm manpower

Policy Framework for SMEs in Singapore (contd.)
Source International Development Association
Competitive analysis External Internal
  • The Russian Govt. has approved a USD 2.6 billion
    program called Electronic Russia 2002 2010,
    intended to boost e-commerce internet use in
    the country
  • It is projected that by 2010, Electronic Russia
    2002 2010 would enable the IT sector to
    account for 2 of the economy (compared to the
    current figure of 0.61 ).
  • Estimated Russian IT spending by 2009 USD 21.8
  • Government-supported venture capital fund to
    focus on SMEs engaged in high-tech research
  • Project called E-Skills for Russian SMEs
    initiated to enhance competitiveness of SMEs by
    supporting the upgrade of their computer based
    operations and the enhancing of local consultancy
    capacity in selected regions
  • In 2006, Russian Outsourcing and Software Summit
    (ROSS) allotted more importance to SMEs by
    organizing a specialized event called SME
    marketplace for SMEs from capitals and regions
    offering opportunities of smaller outsourcing

Policy Framework for SMEs in Russia
Source International Finance Corporation World
Bank Group
Competitive analysis External Internal
  • Ahmedabad, Gandhinagar, Vadodara, Rajkot and
    Surat to be developed for IT parks
  • Government will take initiative to provide
    training in respect of communication and soft
    skills to youth
  • Govt to promote and strengthen educational
    infrastructure of the state
  • Identify and reserve suitable Government land
    for IT industry
  • Assist IT industry units in acquiring land under
    Land Acquisition Act
  • Exemption from payment of Electricity duty for a
    period of 5 years
  • IT and ITeS units will be considered eligible
    for exemption from power cuts
  • Gujarat IT fund under the aegis of Gujarat
    Venture Finance Ltd set up

Source Govt of Gujarat
Competitive analysis External Internal
IT Infrastructure of the States
Karnataka, Tamil Nadu, Maharashtra, Andhra
Pradesh, Chandigarh
West Bengal, Pondicherry, Madhya Pradesh
Uttar Pradesh, Chattisgarh, Orissa, Sikkim,
Himachal Pradesh, Rajasthan
Mizoram, Jammu Kashmir, Assam, Meghalaya,
Uttaranchal, Jharkhand
Lakshwadeep, Manipur, Tripura, Arunachal Pradesh,
Andaman Nicobar, Dadar Nagar Haveli,
Nagaland, Bihar
Roadmaps for IT development in selected states-
Population 50.5 million (5) Area 196,000 sq.
km. (6) GSDP USD 7.1 million Inflation rate
(WPI) 9.3 Per capita power consumption1175
Economic snapshot
Source STPI
Roadmaps for IT development in selected states-
States expenditure on Education Grants received
In Rs Lakh
In Rs Crore
Indias GDP and the IT sector
Grants from Centre include State Plan Schemes,
Central Plan Schemes, Centrally Sponsored
Schemes, NEC/ Special Plan Scheme, Non Plan Grants
Includes Education, Sports, Art and Culture
Roadmaps for IT development in selected states-
  • The main focus is on an extensive critical
    infrastructure and a sound e-commerce foundation
    plentiful opportunities in IT enabled services.
  • Higher standard of living, complete computer
    literacy and e-education Networked and digitally
    accessed Libraries Tele-medicines enabled
    Multiplied revenue generation and large
    disposable income.
  • Some strategies and incentives by the state
  • The state government has a LAN policy for
    purchase of hardware/software and has also framed
    a website policy. Up till now all departments
    have developed their websites and more than 215
    websites have been hosted in the server firm.
  • The government has also taken initiatives on
    Gujarati language software standardization which
    will help improve interoperability of
    software/database among the government
  • The state shall provide highest of security for
    the operation of IT/ITES units. For this purpose
    government shall further strengthen the Cyber
    Crime Detection cell.

Areas of Focus in IT
Roadmaps for IT development in selected states-
Indias GDP and the IT sector
Projected Software Exports and Employment at
current growth rate
Software Exports (Projected )
In Rs Crores
Indias GDP and the IT sector
IT Manpower (Projected )
In Numbers
  • Possible Tier II and Tier II cities- Surat,
    Vadodara, Rajkot, Bhavnagar

Source Frost Sullivan
Strategic Recommendations
Best Practices
  • Andhra Pradesh has a vast potential for growth of
    the IT/ITeS industry due to a large, talented
    human resource pool. As a part of the JKC
    program, the Government has tied up with
    universities, colleges and industry, across the
    state to impart communication skills to the fresh
    graduates to make them employable in the IT
  • 5000 students are screened out from eligible 6th
    semester students. These students are involved in
    communication and other soft skills development.
  • Of the other students left, 3000 students get
    selected for the JKC prepration. Infosys, Wipro
    and Satyam through their campus connect programs
    train these additional resources.
  • Cost for each college turns out to be 25 lakhs.
  • JKC training involves a short-term training known
    as Campus Placement Mission (CPM). In this
    program the students are made aware of the
    recruitment process of different companies.

Strategic Recommendations
Best Practices
  • Establishment of a IIIT helps the state achieve a
    different level in imparting education to the
    students. The following include the typical
    benefits that can be accrued from such a unit, if
    set up
  • Carrying out advanced research and technology
    development in information technologies and their
    societal, scientific, industrial and financial
  • Training and educating, at both undergraduate
    and postgraduate levels, engineers of outstanding
    ability who can become leaders in their
  • Working closely with industry leaders and
    helping them in undertaking programmes needed in
    their sectors
  • In short, a IIIT imparts a uniquely broad and
    interdisciplinary IT education of the highest
    academic quality ensuring a great value addition
    for the IT Industry.

Strategic Recommendations
Best Practices
Government of Maharashtra appointed Training
Providers (TP) in the year 2000 to offer
Maharashtra State Certificate in Information
Technology (MSCIT) course. This certificate was
made compulsory for those wishing to get into
Govt jobs in grades A, B C and for those who
have joined the govt jobs on or after 1st January
2001. On 1st April 2002, Govt of Maharashtra
floated a new company in the name of Maharashtra
Knowledge Corporation Limited (MKCL). MKCL is an
initiative by the Maharashtra Govt to create a
new education paradigm based on e-learning
technologies. It aims to create Network Access
Centers in around 2000 institutions with high-end
computing facilities, broadband connectivity,
rich interactive content and a variety of
e-learning services. Companies such as NIIT,
Aptec are empanelled training providers under
this scheme.
Strategic Recommendations
Best Practices
  • The primary objectives of the BITES are
  • Provide access to the highest quality IT
    education and training, tailored to individual
    needs, delivered cost effectively, anywhere and
  • In order to foster a better academia-industry
    interaction, establish a network of all the stake
    holders- Colleges, industries, Students and
    faculty .
  • Establish a knowledge management portal to share
    and deliver E-learning content online to the
    students and faculty.
  • Get government and Industries to provide projects
    to students and help them in technology
    absorption and project management.

Strategic Recommendations
Roadmap for Gujarat
  • Education
  • It is believed that in 2006-07, the number of
    professionals that would be demanded in the
    IT/ITeS sector will be 26,904 in the state of
  • Gujarat currently has about 22,358 professionals
    in the sector due to lack of availability of
    skilled manpower.
  • The State produces around 611,909 graduates
    every year, nearly 14.5 of which can be directly
    form the IT workforce base and the rest have the
    eligibility to be employed in the ITeS sector.
  • The state has 37 AICTE approved engineering
    colleges which produce nearly 13,000 students
    every year. To make these students employable, a
    program like the Jawahar Knowledge Center
    (successfully adopted in Andhra Pradesh) can be
    introduced in the state.

Strategic Recommendations
Roadmap for Gujarat
  • To the remaining 85.5 of the students
    graduating from the colleges (non-engineering),
    basic soft skills need to be imparted. For this
    purpose, the state Government needs to give
    financial incentives to training institutes like
    NIIT and Karrox to provide soft skill training.
    The subsidy structure follows
  • Industry
  • Cities like Surat, Vadodara, Bhavnagar, Jamnagar
    Rajkot could be granted Rs. 5 crores from the
    State Government to set up IT parks to encourage
    IT/ITeS participation.

Strategic Recommendations
Comprehensive analysis
  • A supportive policy regime can boost the IT
    exports from Tier II and Tier III sectors to
    58921 Crores in 2012
  • Industry feels STPI ownership of Customs process
    would reduce the transaction costs of running
    their operations, especially in Tier II and Tier
    III cities.
  • On infrastructure front, more plug and play
    environment on the lines of Orchid at STPI
    Bangalore, needs to be targeted especially for
    Tier II and Tier III cities.
  • SME companies find dislocation cost to SEZs
    severe and prefer to stay with STPI scheme.
  • Deduction under 10 a and 10 b should be extended
    for Tier II and Tier III cities till 2011-12 to
    ensure de-congested development of IT industry.
  • STPI would move to facilitator role for SME,
    Tier II and Tier III city companies. Its
    incubation, certification, manpower development
    role needs to be accentuated.
  • Investments from Central, State and STPI are
    required to ensure IT development is realized in
    different states.

Thank You
Write a Comment
User Comments (0)