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CHENNAI, Jan. 20

THE Tamil Nadu Government will frame the proposed Information Technology (IT) policy segmenting each sector within IT such as hardware, software, IT-enabled services and IT education. This exercise would be done, apart from taking up the entire IT industry into consideration, said the State IT Secretary, Mr Vivek Harinarain.

In his inaugural address at the Chennai TiEcon2002 seminar here, Mr Harinarain said that so far the policy focussed on infrastructure creation for the whole IT sector. Having created the infrastructure such as the Tidel Park, the Government would now take up issues confronting each sector within IT. As part of this exercise, the IT department had discussions with some industry majors in the respective fields, he said.

According to Mr Harinarain, Tamil Nadu had a strong base in the IT sector, with widespread expertise in all the areas. It was now time to concentrate on each sector and take up various issues, rather than bring all into one basket. The Government would also like Chennai in particular, to be known for its `product development' - like Hyderabad is known for its `body-shopping', he said.

Mr Harinarain said he expected more Government spending on IT in 2002.

In his keynote address, Mr Kanwal Rekhi, co-Founder, TiE (The Indus Entrepreneurs), said that the current recession in the IT sector was the best time for entrepreneurs to enter the industry. "This is the right time for you to prepare and deliver the results in 18 months from now, when the boom period will start," he said.

Terming the recession as the `mildest' when compared to the previous ones that happened in the US, Mr Rekhi said that the recession would put a lot of pressure on weak entrepreneurs and fly-by-night operators to leave the field. This was already happening, he said.

According to Mr Rekhi, in the last two years, a lot of `immature' venture capitalists entered India and invested heavily on the dotcoms and small Internet ventures, only to burn their fingers. However, good ones had emerged, he said. In 2000 around $1 billion capital came into India through VCs, and the subsequent year it was $1.2 billion, next to US and Japan, India attracted the largest VC funding, he said.

"Despite burning their fingers, VCs continue to bet on India for its abundant pool of talented people. A lot of VC money will come into the country," he said.

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