Press Releases: Concern over closure of eight IT firms

MYSORE: A moderate growth in software exports registered by the companies in Mysore during 2001-02 has been overshadowed by the closure of at least eight units during the year.

Software exports from Mysore during the year ending February 2002 amounted to Rs. 39 crore, an increase of Rs. nine crore over the Rs. 30 crore achieved last year.

However, experts appear more worried over the city's software industry falling woefully short of the export target of Rs. 60 crore. Another major area of concern among the specialists in the industry is the closure eight IT companies for various reasons, bringing down the total number of companies from 28 to 20 during the year.

Though the State Government keeps promising steps to develop Mysore as an alternative IT destination, taking into consideration its potential, they have remained on paper, experts say. "There is a clear lack of political will on the part of a Bangalore-centric State Government to pay adequate attention to the promotion of Mysore," says an IT industry expert.

The need for an airport in Mysore for the promotion of IT industry as well as tourism has been raised time and again. Even the Minister of State for Information Technology, B.K. Chandrashekar, who was in the city recently, admitted that the absence of an air-link was proving to be a stumbling block for the growth of the IT industry in Mysore.

He promised to explore the possibility of starting short-haul commercial flights from Mysore by private airlines. It remains to be seen whether he will fulfil the promise. Experts opine that Mysore as an air-link destination can generate enough business as well as tourism traffic to economically sustain flight facilities. A recent survey conducted by the Confederation of Indian Industries (CII) says that at least 40,000 passengers will use to and fro flight services annually if Mysore is linked to any metropolitan city. Though Mysore is barely 140 km. from Bangalore, the silicon valley of India, the advantage of the city's proximity to Bangalore becomes tangible only if the time consumed for commuting between the two cities is reduced considerably.

To reduce the travelling time between the two cities, steps should be taken for improvement of rail as well as road links. The density of traffic on Mysore-Bangalore Highway is only increasing with each passing day. Either the highway should be improved and widened or an expressway should be laid. Steps can be taken to connect Mysore and Bangalore by more trains, experts say.

However, sources at the Software Technology Park of India (STPI), Mysore, which keeps an account of IT exports from Mysore, say that the software industry in Mysore has grown steadily over the past few years. From Rs. 80 lakh in 1998-99, it increased to Rs. 8.2 crore in 1999-2000, and touched Rs. 30 crore in 2000-01. Software exports from Mysore registered a substantial increase in 2001-02 by netting Rs. 39 crore despite the global economic slowdown, particularly in the IT sector.

The STPI officials say that the eight companies, whose registration have either been cancelled or are likely to be cancelled, are "non-operative" companies. Most of them never started functioning at all. They established the companies two years ago when the Government announced a five-year tax-holiday. A few companies, which have closed down, faced problems in securing clearances from the Department of Central Excise and Customs, the Reserve Bank of India, and other government agencies. However, Prof. Chandrashekar has promised to speak to the Centre on the difficulties being faced by IT entrepreneurs in obtaining customs clearance.