Ultra Rapid IT Growth has its Pitfalls

The Economic Times speaks of the Andhra government giving land to select IT companies that show the promise of greater employment opportunities. Smaller IT fry have been shown the door when they requested for land to set up IT centers.

Land at Cyberabad, the IT capital of Andhra Pradesh state is scare to come by and is turning into a very precious commodity. What this means is that the government wants only Fortune 500 companies which easily boast of Rs. 50 crore (5 million rupees) in investment consistently for the past three years and promise employment for at least 1000 to 1500 workers are being given the red-carpet welcome.

Small scale companies and would be entrepreneurs are crying hoarse on the matter. Says Moschip Semiconductor chairman K Ramachandra Reddy that he was asked to set his company 50 km away from the capital when he approached the state government for land.

Moldtek managing director has a similar story that speaks of his request for land being turned down as his company which is a KPO dealing with engineering design could not show the necessary headcount. He adds that since the company does high end niche work, having more hands does not help, rather skilled hands does.

Infosys on the other hand secured 550 acres of land at cheap prices.

While the government might be reaping the immediate benefits of such a policy, the Andhra government should realise sooner than later that the unbalanced nature of this policy might prevent startups from taking wing in the state.

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sri said…
Thanks for highlighting the plight of startups.

There is a bigger scam in the making related to this land grab by big companies. Infosys's recent land acquisition is inconsistent with its growth prospects in near future. The way it is sucking land in each and every state, looks like infosys will be making a killing in another decade with these cheaply bought lands.