How IT, SEZs are widening the digital divide

Union minister of state for commerce Jairam Ramesh in his address to the Nasscom executive board:

“IT exports in 2006-07 were around Rs 144, 214 crore. Seven cities accounted for a whopping 95 per cent — Bangalore (33 per cent), the National Capital Region (15 per cent), Madras (14 per cent), Hyderabad (13 per cent), Poona (10 per cent), New Bombay (8 per cent) and Calcutta (2 per cent).

“Seven cities together account for yet another 3 per cent—in descending order of contribution these are Mysore, Bhubaneswar, Mangalore/Manipal, Gandhinagar, Thiruvananthapuram, Mohali and Jaipur. Four cities together account for yet another 0.6 per cent: Indore, Vishakapatnam, Kochi and Coimbatore in descending order of contribution.

“Furthermore, SEZs appear to be increasing the digital divide. I have always felt that the true value of SEZs must be judged by the extent to which they help promote labour-intensive manufacturing. But so far, of the 142 SEZs notified, 86 are for IT and ITES alone. And of these 86, the usual suspects are most prominent — 26 are in Andhra Pradesh, 14 in Tamil Nadu, 13 in Karnataka and 10 in Maharashtra, making a total of 80 per cent in these four states alone.

“The need now is to think of the under-served regions and areas. How long can the IT industry be in the “To H1B or not to be H1B” mindset? Seventy-five per cent of our software industry is exports, unlike China, where the domestic market consumes 75 per cent of the business.