STPI DG Omkar Rai: We have created conducive IT Infra to disperse tech industry to Tier II and Tier III cities

Since its inception in 1991, Software Technology Parks of India (STPI) has played seminal role in the growth of Indian IT industry especially by creating conducive and ideal IT infrastructure in places where nobody was keen to go. Now, it is on the way to create 10 lakh square feet of space across the country for IT companies, small businesses and startups.

Dr Omkar Rai, Director General, STPI speaks to Mohd Ujaley about how his organisation is focused on taking the IT industry to Tier II and Tier III cities. “Today, STPI is in all the states and some of them have more than one technology park, and this is how we not only tried to match the demand of the IT industry but in many cases we triggered the demand,” said Dr. Rai, adding that STPI has created conducive and ideal IT infrastructure in places where nobody was keen to go so that the IT industry can migrate to those places.

Edited Excerpts:

What have been some of the major achievements of STPI in the last five years?
Software Technology Parks of India (STPI) since its inception in 1991 has played a seminal role in the growth of Indian IT industry. Way back, it was set up to offer a single window clearance system to software exporters, to provide necessary network bandwidth to the IT industry and act as a plug and play centre for small businesses.

In those days, the word startup or technology startup was not as popular as it is today and most of the companies that operated from our premises already had business, they had order in place, and they came to us to execute their orders. Most of them were services companies.

However, with the growth of the industry, it was envisaged that IT infrastructure should also grow. So, the Ministry of IT & Electronics (MeitY) decided to incentivise creation of IT parks by private partners under Infrastructure Service Provider Scheme. STPI implemented this scheme with private partners on ‘own created and own operated’ basis.

If you broadly look at our journey, we have completely overhauled ourselves as per the needs and requirements of India’s IT industry. Initially, one of the major services that STPI used to offer to the IT industry was satellite based gateways because in those days BSNL had the monopoly, and as private operators were not allowed in the sector. So, STPI was actually giving bandwidth to software exporters – something which needed 24×7 working attention. We have grown from 36 centres to 58, in the last five years, and 25 more centres are in the pipeline.

What kind of change do you see in India’s IT industry from cost and innovation point of view?
As far as the IT industry in India is concerned, they have significantly grown in eight-nine locations in India. They have moved up in terms of value chain, number of employments and cutting-edge technology outsourcing. However, gradually, they are also under pressure because of rising manpower cost, urban infrastructure issues and logistic challenges. This has created strain on their margin and the cost arbitrage, once it had, is now eroding very fast. And, that is why we are trying to create newer opportunities in different locations.

The good thing is that India’s IT service industry has matured and most of the firms are working at the very top level of the value chain – right from ideating to product creation to technology development – everything is happening now within India. This has been possible due to world class talent pool that we have, and also state after state are promoting themselves as an IT hub. This has ensured that infrastructure that is being built in Tier II or Tier III cities are the level of Tier I.

During this transition of the IT industry, what new initiatives has STPI taken to enable the growth?
During this period, we tried to disperse into Tier II and Tier III cities and that is how we have 58 centres across the country. Today, STPI is in all the states and some of them have more than one technology park, and this is how we not only tried to match the demand of the IT industry but in many cases we triggered the demand. STPI has created conducive and ideal IT infrastructure in places where nobody was keen to go so that the IT industry can migrate to those places. We also sensitised the state governments to get ready to cater to the IT industry needs.

What is the utilisation level of STPI infrastructure currently?
The utilisation of our infrastructure at a given point of time is very high. Obviously, you cannot have 100 per cent occupancy, but most of our infrastructure is almost all the time occupied. The reason for this higher occupancy is that it is available to every one – startups to IT companies to small businesses.

What are your future plans for growth?
To support dispersal of the IT industry, small businesses and startups in areas where it has not gone. We decided to create 10 lakh square feet of space across the country. Some of those infrastructures are now ready and some are in the pipeline.

Places like Chandigarh and Mohali where we developed 1.25 lakh square feet of space is already buzzing. In fact, the Punjab Government has decided to launch its startup programme from our premises. We have increased the number and quantum of infrastructure across the country.

Also, in line with the Prime Minister’s vision of Digital India, we are trying to open more and more centres in eastern India. We have stepped up our focus on states like Bihar, Jharkhand, West Bengal, Odisha and all the states in North Eastern region. We have approved five centres in the last three-four years in the North East.

STPI is also working on BPO promotion schemes. Please highlight your experience
The Indian BPO Promotion Scheme and North East BPO Promotion Scheme have been launched to ensure regional growth and create regional jobs along with ensuring that private companies are able to maintain their cost arbitrage. We are offering incentives upto one lakh rupee per seat. Now the seats have grown to one lakh. The programme is showing very good results. It has allowed the industry to disperse into areas where the companies have never thought of going to. It is a win-win situation for everyone. For the government, it is balanced regional growth; for the industry, it is cost arbitrage; for young people, it is about getting jobs in their own places. This is creating a lot of impact on the ground.

How profitable is STPI?
STPI is self-reliant and meets all its requirements, right from administrative to capital expenditure. The infrastructure, we are developing and going to develop is coming from our surpluses and revenues that we have generated. We are not getting or not seeking any grants from the government. So we are totally self-reliant. Per capita or our per-employee revenue must be matching with the revenues of PSUs and large private companies.

How do you look at the government’s move on data localisation? Are our data centres ready to match the demand?
If you look at STPI data centres, we are not creating less than Tier 3 data centre. Our data centres are all world class. The government initiative is going to mandate that data of citizens remains within India. This will obviously increase the demand and we are ready to meet the same.

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