« Back to articlePrint this article

Free land to IT firms! New Andhra policy

December 06, 2004 16:20 IST

The Andhra Pradesh government is all set to unveil a brand new information technology policy to take head on competition from the other IT hubs from across the country.

But there is a hitch. The new IT policy is likely to hit a roadblock as soon as it is announced.

The reason: free land.

The quintessence of the new IT policy being prepared by Chief Minister Y S Rajasekhara Reddy's government is doling out of free land to high-end software developers, research and development companies and biotech firms.

"We will provide free land to all companies that want to set up high research and development labs in the state. Andhra Pradesh wants to overtake IT hubs like Bangalore in high-end IT research and development," a senior official who is preparing the draft of the state government's new IT policy told

The policy is to be announced next month. The salient features of the new IT policy would include provision of free land to IT companies, a special package to offer incentives to the international certification bodies, various kinds of subsidies for patents and quality certification and a new IT syllabus in colleges.

Andhra Pradesh came out with its first IT policy in 1999, then by the former chief minister N Chandrababu Naidu. The policy offered land to IT multinationals at discounted rates with a strict clause that these firms should ensure employment generation in the state.

The current policy offers 25 per cent rebate on power tariff, 50 per cent rebate on stamp duty, rebate in the cost of land at Rs 20,000 per each job created and investment subsidy of 20 per cent on fixed capital investment.

The policy also offered special incentives in land cost for major project with investment of more than Rs 50 crore (Rs 500 million).

Officials said that although the current policy has been investment-friendly and effective, many multinational companies have opted out of Hyderabad because of better investment options offered by governments like Tamil Nadu and Karnataka.

"We have realised that if we do not embark on a new policy, no IT company will come to Hyderabad hereafter. That is why we are going to offer free land to key software and business process outsourcing companies engaged in research and development initiates," the official said.

But the new IT policy is likely to be sternly opposed by the Naxalites. Already, the Communist Party of India-Maoist state secretary Ramakrishna says that the promise of free land to IT developers will be the 'second colonization of India by foreigners.'

"How can the government even think of distributing free land to IT companies when farmers are committing suicide across the state because of lack of land," Ramakrishna asked.

Already, Ramakrishna said that the Naxal groups have demanded the distribution of 27,000 acres of prime land in and around Hyderabad encroached upon or occupied by business houses, IT firms, pharma companies, real estate developers, film producers and other vested interests.

Naxal leaders like Ramakrishna, when they came for peace talks with the AP government in October, had submitted a list of companies, which they claim, have encroached upon the agricultural land on the outskirts of Hyderabad and Secunderabad.

The companies the Naxals listed included Ramoji Film City, Satyam Computer & Byrraju Foundation, Dr Reddy's Labs, Wipro, Infosys, Satyam, Microsoft, Oracle and GE.

George Iype in Hyderabad