The Hindu Business Line : ‘Kerala needs to improve quality of IT education’

Thiruvananthapuram, Sept. 10 Kerala needs to keep in readiness a talent pool to make most of the upturn in the IT industry expected during the next two to three-year period, according to Mr S.D. Shibulal, Chief Operating Officer, Infosys.

IT is still very much a sunrise industry, Mr Shibulal said at a conference on ‘IT in Kerala – Challenges and Opportunities,’ organised here by the Kerala State Office of the Confederation of Indian Industry (CII), Southern Region.

IT EDUCATION

The State needs to drastically improve the quality of IT education, Mr Shibulal said, saying that currently only 10 to 15 per cent of the 25,000 engineering graduates it produces annually is employable.

The State should seek to emerge as a destination for IT talent and reduce export of talent. Ideally, it should learn from the Karnataka experience, where a majority of IT professionals belong to different sub-nationalities.

While dwelling on its ability to attract investments, Mr Shibulal said that the State would have to get rid of the perceived investor-unfriendly tag. This continues to weigh on investor decision. The State needs to brand itself better. For an inspirational model, it does not have to look far beyond its own tourism industry where the branding exercise has reaped rich dividends.

Tax holidays and other incentives backed up by a single window for approvals and clearances are inevitable elements that go to do up the investor-friendly image. Required governance processes should also be initiated to ensure that the single-window works on ground.

The southern States, home to 44 per cent of the listed IT companies and accounting for Rs 60,000 crore in export revenues, have established their credentials in the IT sector.

But Kerala is far removed from where the action is, as seen in its export revenues of Rs 1,500 crore till date. The State accounts for five per cent of the talent pool, but contributes only 0.5 per cent to export revenues.

MASS EMPLOYER

According to Mr R. Anand, Partner, Ernst and Young India, the software industry could become the largest employer after agriculture and textiles over the next few years. Stable political environment and durable policies will expedite this paradigm shift in the pattern of distribution of employment opportunities in which IT will take centre-stage.

Mr Anand cited the Revenue Foregone Statement of the Union Budget that put the revenue forgone through various incentives and exemptions for 2008-09 at Rs 68,000 crore. Of this, software industry accounted for Rs 11,700 crore or roughly 16 per cent.

There is a raging debate on the efficacy of persisting with these incentives and exemptions and for how long. But it provides another solid reason why Kerala should look at tier I and tier II cities for fresh investments to make of the incentives and exemptions.

SUNSET CLAUSE

According to Mr G. Vijayaraghavan, President, Venture Management Associates, the STPI sunset clause will make it inevitable that companies will henceforth look to investing in SEZs only.

This is at variance with the proclaimed Kerala Government policy that favours setting up small parks, which presented a difficult proposition in terms of its capability to attract investments.

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