IT sector in State hobbled by lack of robust policy

Ever since Jayalalithaa’s death, there has been no progress on giving a fillip to start-ups either

Startup. Conceptual illustration. The concept of startup for business, marketing, management and other activities. Vector design element

Tamil Nadu may have over four lakh people working in the IT sector, but the State government still lacks a robust IT policy and a vision to develop innumerable start-ups mushrooming across the State.

Over the last two years, Tamil Nadu’s IT Minister and Industries Minister have announced on several fora that a new policy will be out soon. But nothing has come out till date.

The State saw its last IT policy almost a decade ago (2008).

The policy catering to start-ups has also been talked about but nothing has come out in black and white. It was former Tamil Nadu Chief Minister Jayalalithaa who announced during the first Global Investors Meet (GIM) that her government would soon come out with these policies.

“Not having an updated IT policy is definitely a concern. A policy is a guiding force to attract investments into the State,” a senior director at an IT firm, which has its largest talent pool in Tamil Nadu, said. “Only if we have a policy in place, companies will realise that the government is serious about attracting investments and come here. Today, globally clients are talking about automation, artificial intelligence (AI), Internet of Things (IoT), digital transformation, robotics and there are several changes that are happening in the technology space each second. A new policy is a must,” he said.

Four senior officials at different IT firms said that neighbouring States like Telangana have several policies in the IT and start-up space. They lamented that the government kept talking about it, but nothing had fructified with regard to these policies.

One of them even questioned whether the State was really serious about developing the IT sector.

“If you look at Telangana, they have a cyber security policy, innovation policy, data analytics policy and they even have an IoT policy to position the State as a hub for IoT specific solutions and develop IoT products. I don’t understand what is stopping Tamil Nadu from framing a policy and announcing it,” said another executive at an IT firm in Chennai, which has its headquarters in Bengaluru.

IT firms say that the State has the largest talent pool and is also one of the largest software exporters.

Targeting start-ups

In the start-up space, the State has been talking about formulating a policy. Out of the 29 Indian States, 22 have formally come out with policies that are targeted at start-ups.

According to a report on Indian Venture Capital and Private Equity by IIT-Madras, “Cumulatively, the 22 State governments’ policies envisage creation of incubation space of 5.1 million square feet, 48,000 start-ups, and investment of close to ₹34,000 crore of venture funding by 2022.”

“Tamil Nadu needs a start-up policy to reinvigorate technology-based entrepreneurship in the State. It is not that venturing and entrepreneurship is lacking in the State, but the State has lagged in terms of innovation and technology-based entrepreneurship,” said Professor Thillai Rajan, Department of Management Studies, IIT-Madras who closely tracks the start-up sector in India.

“Unless and until there is a strong policy, the State is unlikely to reach the leadership position that it is capable of. Having a policy makes a difference to the start-up ecosystem,” he said.