Vishakapatnam, September 20: Despite signs of an economic rebound, the IT and ITES sector in the State, particularly in tier II cities, appears to be struggling to regain momentum, notwithstanding a plethora of sops from the State government.
With only a few projects on hand, the future looks bleak for several companies dotting this Port City.
During the last couple of years, the State government allotted about 150 acres on the Visakha- Bheemili road to several IT companies.
An important part of the agreement with the latter was that for each acre allotted, the companies should generate at least 100 jobs. Fourteen companies were allotted lands at H-1, H-2 and H-3 hills and they were supposed to provide jobs for 15,000 locals.
But business has not been looking up since 2008 on account of the global meltdown.
“The margin of profit in the work that we do is about 25 per cent. But the volume of business has come down by 70 per cent during the last two years. We are, somehow, managing the show. Unable to weather this storm, 13 have shut shop,” managing director of an IT company admits. Representatives of the companies admit failure in providing the jobs they had promised.
Says a CE O: “We are helpless.. the business is not encouraging. As against a target of `2,500 crore IT exports in 2009-10, we achieved just about ` 794 crore.” Small companies even complain of diminishing domestic business. “We have no work abroad. The domestic business is being cornered by top companies. We are left in the lurch. Even government work is going to top companies,” a company official rues. Confirming the sorry state of affairs, an official of the Andhra Pradesh Industrial Infrastructure Corporation official points out that even a company like Wipro had not created a single job since completing a project related to infrastructure works three years ago.
Another official at the zonal office of the APIIC here explains that so far only 3,200 jobs have been provided by the companies till date and wonders if even these statistics are correct. “The companies are deputing senior personnel from outside.
Wipro has not started its business here.
Nobody knows why and government officials do not ask,” he says.
-Agencies