New IndPress

Bangalore, Sep 4: Burying the hatchet with the Karnataka government over the development of Bangalore, Infosys Technologies chief mentor N R Narayana Murthy has agreed to head a vision group to help the city retain its pre-eminent IT slot.

Murthy, who stepped down as chairman of the country's second largest IT bellwether in July, has accepted the offer of Chief Minister H D Kumaraswamy to head the IT vision group and shape the state's IT vision.

According to the chief minister's office, Murthy agreed to accept the offer in a letter to Kumaraswamy last week. "I am grateful to you for inviting me to chair the state IT vision group. It will be a privilege and pleasure to do so," Murthy stated in his acceptance letter.

It may be recalled Kumaraswamy had invited the IT czar to head the vision group during his address at the silver jubilee celebrations of Infosys in Mysore July 31.

"The state government would like to benefit from Murthy's vision, his enormous experience and desire to work for Karnataka after his retirement," Kumaraswamy said on that occasion.

Murthy had resigned from the post of non-executive chairman of the Bangalore International Airport Limited in November last following a spat with Kumaraswamy's father and former Prime Minister H D Deve Gowda.

He relented to head the IT vision group after he found the "young and dynamic" chief minister committed to the development of knowledge-based industries in the state and retaining Bangalore's edge in the IT sector.

"Murthy had consented to chair the vision group at a meeting with the chief secretary (B K Das) and IT department officials at a meeting Aug 25, where issues related to the growth of IT and knowledge-based industries were discussed," said IT secretary Anup Poojary.

In the run-up to the Bangalore IT event next month-end, the vision group will be meeting soon to chalk out a time-bound programme to promote knowledge-based industries and showcase the state's eco-system to prospective investors.

"The government is keen to replicate the success of Bangalore in the knowledge sector in secondary cities across the state by creating an enabling environment, including infrastructure, connectivity and logistics," Poojary told IANS here on Sunday.

While the vision group on biotechnology (BT), headed by Biocon chairperson Kiran Mazumdar-Shaw, will continue to function separately, the IT vision group will focus on implementing the state's millennium IT policy announced in 2000 under the then IT-savvy chief minister S M Krishna.

Accounting for 37 percent of the country's total IT exports of Rs.1, 008 billion ($22.4 billion) in the last fiscal (2005-06), Karnataka retained its top slot by exporting software services and hardware goods to the tune of Rs.401 billion ($8.9 billion).

As India's silicon hub, Bangalore alone contributed for Rs.366 billion ($8.14 billion), registering a year-on-year growth of 36 percent over the previous fiscal (2005).

With the booming IT sector sustaining the growth rate in the current fiscal (2006-07), the state-owned software technology parks of India (STPI) has projected IT exports from Karnataka at Rs.490-500 billion ($10.9-11.1 billion) by March 31, 2007.

About 1,200 tech firms, including about 500 multinationals employ about 375,000 people, including 170,000 in the IT-enabled services such as call centres and business process outsourcing services (BPO).

In terms of investments, the state has attracted 201 IT firms during the last fiscal (FY 2006), including 124 foreign equity companies, with a combined investment of Rs 27.61 billion ($614 million).

"At the rate of four new companies every week, the STPI units have been growing at a CAGR (compound annual growth rate) of 13 percent. About 10 foreign equity firms were approved every month in the last fiscal," STPI director B V Naidu recalled.

In order to ensure Bangalore remains the preferred IT destination, the government is setting up 1,400-acre hardware technology park near the upcoming international airport at Devanahalli and has earmarked 500 acres each at Bidadi and Dobbaspet on the outskirts of the city for setting up new software companies.

As per the McKinsey-Nasscom report, Karnataka is projected to achieve $20 billion IT exports by 2010; with about 500,000 employed in the industry, including IT enabled services/BPO segments.