For the fledgling IT sector in Kashmir, the road to development is no different from the roads in its city. Zubair A Dar reports.
In 2003, when a group of four professionals came together to establish a software company in Kashmir, friends and family members ridiculed the idea. Kashmir, for them, did not provide the best of opportunities for an IT company. But the entrepreneurs persisted and set up Musky Software Solutions Pvt. Ltd. Today, Musky has become a brand in Information Technology circles in Kashmir.
Over the past one decade, at least 51 such companies have come up in Kashmir’s IT sector. Their combined turnover touches Rs 40 crore a year. At least six of them have their clientele scattered over four continents – Asia, Europe, North America and Africa. These 51 companies, that collectively form the software sector in Kashmir, employ around 3000 persons and can prove to be a major employment generator in case government pays some attention.
But success has come the hard way.
While establishing Musky Software, the owners had only their experience to rely on for software development. While talent was scarce, infrastructure too was proving to be a road block.
“We started with our company in a 12X15 feet room in municipal complex at Regal Chowk. It could hardly accommodate six persons,” says Fayaz Bhat, Chief Operating Officer of Musky Software Solutions Pvt. Ltd.
For technical support, the company had no where to look to. The Software Technology Park of India (STPI) established under a centrally sponsored scheme at Rangreth in the outskirts of Srinagar offers some help, but entrepreneurs say that they can hardly afford the price.
STPI registers smaller entrepreneurs to enable them export their software and exempts them from income tax. “We have been given powers to exempt smaller software companies from income tax on export of software and also help them import items duty free,” says Asim Khan, Director STPI Srinagar. “We also help entrepreneurs get visas on priority basis for attending conferences and other such purposes. With our registration, we also enable smaller software companies to sell 50 percent of their export in India.”
Khan says that STPI also offers incubation mechanism to smaller companies. Through this mechanism, STPI offers space to companies at Rs 6 per feet for a month besides the electricity bills depending on usage. It also charges customers Rs 2 per feet for maintenance and security. The idea is to enable smaller companies get all the required facilities at one place as the STPI also provides internet facilities as well. But smaller companies say that they can not afford the prices.
“Other than registering ourselves with them, there is no role of STPI in our work,” says Bhat. Lack of uninterrupted power supply and internet service added to Bhat’s vows when he began software development in the small room at Regal Chowk. “It took us more than six months to get our first power connection,” Bhat says. “Even now, starting a small company is the most difficult part of the job. We lack plug in facilities and everything, especially electricity and internet, has to be put in place first before the company starts production. It takes months.”
But the group did not give up. Putting their experience to best use, the group first explored information technology hubs like Bangalore and Hyderabad for assignments. “We tried and thankfully got our first project,” says Bhat. He says that a couple of banks operating in Bangalore had purchased software developed by Infosys. The developers were looking for people for core team training at these banks. “Three of us took up the assignment,” says Bhat. “This assignment, plus the one that we did for upgrading the software of an apparels company in USA, helped us survive for the first six months. After that, projects have been coming our way regularly.”
Musky Software, however, got its first major break in 2007. Their services were hired by a few companies in south and western Africa for software implementation, post implementation support and help desk support. This, Bhat says, marked the turnaround. Since then, Musky has grown in size and now has 30 boys and girls in its team. The company has also developed its own software applications.
“We have products for e-commerce, web content management and multiple site content management,” says Bhat.
At present, Bhat says, that the company is handling four projects for US based companies in sectors like health, e-commerce, social and other sectors. “This is apart from projects we are handling in South Africa and West Africa,” says Bhat.
While the company has grown in size, its skill-set also has improved. Bhat says that 90 percent of its employees have been trained within the company. The method is to engage people in projects lead by experienced persons in the company and engage new comers in the process. In the second stage, these people are engaged in the ideation process and are equal leadership opportunity as that of experienced project handlers. In the final stage of the training process, these members are allowed to lead a team in developing a project specific to a certain company or a particular service like banking or e- commerce while the experienced members work at the back end.
“Over the past few years, we have been using this method of training. It has been successful,” says Bhat.
The method is followed by other companies as well. “We hire people who have some concept of website development. They work with us for some time and then go on to handle projects on their own,” says Irfan of iKraft Software. The company, established by three young software professionals, has developed websites for clients in USA and Europe.
Like Musky and iKraft, 51 companies in Kashmir work in creating software solutions, website development and research for IT sector. Many projects, however, do not come directly to these companies. Bigger companies outsource their work to these smaller companies and thus pay them only a part of what the client has actually agreed to pay.
“We are still happy with what we are getting,” says Bhat. “It is at least better than how the government treats our companies.”
Bhat says that his company bid for two separate projects in government sector. “One was with SMC. Everything was finalised before the authorities said that some approvals had to be obtained to start the project. It wasted six months before I stopped following it up,” says Bhat. “Second project was with cooperative bank. It stopped at the stage of signing the agreement.”
Bhat says that the general objection raised against these projects is against engaging local private companies in these projects. “In their notes, secretaries in different departments ask why engage private companies when NIC can also do this,” says Bhat.
It is this lack of decision that has prevented the state government from spending the money allotted for e-governance over the past three years. Records show that 1.5 crore rupees were allotted to this sector in 2006-07 and only 50 lac rupees were spend, most of which went as salary. In 2007-08, the expenditure went up to 70 lac rupees against an allotment of 15.2 crore rupees that came in part from the central government and part from the state exchequer. Last year, government allotted 17 crore rupees for e-governance and other information technology projects in government, but the expenditure did not cross one crore rupees.
Several projects in IT sector, like the establishment of 135 Community Information Centres at Rs 94 lacs, could not take off. “It was jointly funded by state and centre. State later said it could not take off because of lack of manpower,” said an officer in IT department.
With government likely to come up with an IT policy in coming weeks, entrepreneurs are hopeful that government will ensure engaging local software companies in its e-governance projects. Will their hope crystallise into reality, only time will tell.
Over the past one decade, at least 51 such companies have come up in Kashmir’s IT sector. Their combined turnover touches Rs 40 crore a year. At least six of them have their clientele scattered over four continents – Asia, Europe, North America and Africa. These 51 companies, that collectively form the software sector in Kashmir, employ around 3000 persons and can prove to be a major employment generator in case government pays some attention.
But success has come the hard way.
While establishing Musky Software, the owners had only their experience to rely on for software development. While talent was scarce, infrastructure too was proving to be a road block.
“We started with our company in a 12X15 feet room in municipal complex at Regal Chowk. It could hardly accommodate six persons,” says Fayaz Bhat, Chief Operating Officer of Musky Software Solutions Pvt. Ltd.
For technical support, the company had no where to look to. The Software Technology Park of India (STPI) established under a centrally sponsored scheme at Rangreth in the outskirts of Srinagar offers some help, but entrepreneurs say that they can hardly afford the price.
STPI registers smaller entrepreneurs to enable them export their software and exempts them from income tax. “We have been given powers to exempt smaller software companies from income tax on export of software and also help them import items duty free,” says Asim Khan, Director STPI Srinagar. “We also help entrepreneurs get visas on priority basis for attending conferences and other such purposes. With our registration, we also enable smaller software companies to sell 50 percent of their export in India.”
Khan says that STPI also offers incubation mechanism to smaller companies. Through this mechanism, STPI offers space to companies at Rs 6 per feet for a month besides the electricity bills depending on usage. It also charges customers Rs 2 per feet for maintenance and security. The idea is to enable smaller companies get all the required facilities at one place as the STPI also provides internet facilities as well. But smaller companies say that they can not afford the prices.
“Other than registering ourselves with them, there is no role of STPI in our work,” says Bhat. Lack of uninterrupted power supply and internet service added to Bhat’s vows when he began software development in the small room at Regal Chowk. “It took us more than six months to get our first power connection,” Bhat says. “Even now, starting a small company is the most difficult part of the job. We lack plug in facilities and everything, especially electricity and internet, has to be put in place first before the company starts production. It takes months.”
But the group did not give up. Putting their experience to best use, the group first explored information technology hubs like Bangalore and Hyderabad for assignments. “We tried and thankfully got our first project,” says Bhat. He says that a couple of banks operating in Bangalore had purchased software developed by Infosys. The developers were looking for people for core team training at these banks. “Three of us took up the assignment,” says Bhat. “This assignment, plus the one that we did for upgrading the software of an apparels company in USA, helped us survive for the first six months. After that, projects have been coming our way regularly.”
Musky Software, however, got its first major break in 2007. Their services were hired by a few companies in south and western Africa for software implementation, post implementation support and help desk support. This, Bhat says, marked the turnaround. Since then, Musky has grown in size and now has 30 boys and girls in its team. The company has also developed its own software applications.
“We have products for e-commerce, web content management and multiple site content management,” says Bhat.
At present, Bhat says, that the company is handling four projects for US based companies in sectors like health, e-commerce, social and other sectors. “This is apart from projects we are handling in South Africa and West Africa,” says Bhat.
While the company has grown in size, its skill-set also has improved. Bhat says that 90 percent of its employees have been trained within the company. The method is to engage people in projects lead by experienced persons in the company and engage new comers in the process. In the second stage, these people are engaged in the ideation process and are equal leadership opportunity as that of experienced project handlers. In the final stage of the training process, these members are allowed to lead a team in developing a project specific to a certain company or a particular service like banking or e- commerce while the experienced members work at the back end.
“Over the past few years, we have been using this method of training. It has been successful,” says Bhat.
The method is followed by other companies as well. “We hire people who have some concept of website development. They work with us for some time and then go on to handle projects on their own,” says Irfan of iKraft Software. The company, established by three young software professionals, has developed websites for clients in USA and Europe.
Like Musky and iKraft, 51 companies in Kashmir work in creating software solutions, website development and research for IT sector. Many projects, however, do not come directly to these companies. Bigger companies outsource their work to these smaller companies and thus pay them only a part of what the client has actually agreed to pay.
“We are still happy with what we are getting,” says Bhat. “It is at least better than how the government treats our companies.”
Bhat says that his company bid for two separate projects in government sector. “One was with SMC. Everything was finalised before the authorities said that some approvals had to be obtained to start the project. It wasted six months before I stopped following it up,” says Bhat. “Second project was with cooperative bank. It stopped at the stage of signing the agreement.”
Bhat says that the general objection raised against these projects is against engaging local private companies in these projects. “In their notes, secretaries in different departments ask why engage private companies when NIC can also do this,” says Bhat.
It is this lack of decision that has prevented the state government from spending the money allotted for e-governance over the past three years. Records show that 1.5 crore rupees were allotted to this sector in 2006-07 and only 50 lac rupees were spend, most of which went as salary. In 2007-08, the expenditure went up to 70 lac rupees against an allotment of 15.2 crore rupees that came in part from the central government and part from the state exchequer. Last year, government allotted 17 crore rupees for e-governance and other information technology projects in government, but the expenditure did not cross one crore rupees.
Several projects in IT sector, like the establishment of 135 Community Information Centres at Rs 94 lacs, could not take off. “It was jointly funded by state and centre. State later said it could not take off because of lack of manpower,” said an officer in IT department.
With government likely to come up with an IT policy in coming weeks, entrepreneurs are hopeful that government will ensure engaging local software companies in its e-governance projects. Will their hope crystallise into reality, only time will tell.
