#J&K Budget 2016-17: IT Industry Hails the Initiatives

Dr Haseeb A Drabu, J&K Finance Minister, addressing media in Srinagar after presenting his second budget on May 30, 2016. (KL Image: Bilal Bahadur)
Dr Haseeb A Drabu, J&K Finance Minister, addressing media in Srinagar after presenting his second budget on May 30, 2016. (KL Image: Bilal Bahadur)



The state IT industry, which was described as ‘an important sunrise industry in the state’ by the Finance Minster Dr Haseeb Drabu during his budget speech, has expressed great satisfaction for the initiatives announced in the state budget. The Finance Minister announced the following initiatives for the IT industry in the state budget:

  • An offer of Joint Venture opportunity to state’s top 10 IT companies with Rs. 10 crore set aside by the state government as investment in the JV
  • Waiver of permission fee for sanctioning “right of way” for laying optic fibre cables
  • 50 per cent subsidy on bandwidth for connectivity to IT firms
  • 50 per cent concession on Quality Certification and Patent filing charges.

There are also other aspects of the budget 2016-17which the IT industry expects to leverage to the fullest. These include:

  • A start-up fund of Rs. 5 crore.
  • Viability Gap Funding for PPP project partners

This is for the first time IT industry of the state has been discussed in the budget. The state IT industry had a turnover of Rs.337 crore during the last financial year and employs nearly 13 thousand youth. Despite sustained advocacy since 2009 through the industry forum ICTA (Information and Communications Technology Association of J&K), the sector has not received any recognition or patronage by the state government.

“IT has remained an orphaned sector for a long time. There have been some piecemeal initiatives from the government in the past. However they all fell by the side. This budget puts us on the radar. We will build upon this. We truly applaud the initiatives announced for the IT industry by the Finance Minister,” said Jahangir Raina, Chairman ICTA. ICTA has been demanding setting up of promotional cell for IT industry. It hopes to find resonance among the concerned authorities.

IT entrepreneurs are upbeat about the announcements made by the Finance Minister.

Sheikh Imtiaz Ahmed is the CEO at Comtech, a leading e-governance company of the state. His business strategy has been to leverage e-governance project portfolio of various state governments. The company has worked on projects in states including Rajasthan, Bihar, UP, and Haryana apart from the home state of J&K. He is however excited about the prospect of startup fund announced in the budget. “The trend in the country is changing. Previously we relied heavily on outsourcing and government projects. But now startups are coming up with niche and innovative solutions. A startup ecosystem of Venture Capitalists, Angel Funds, Incubators, and Growth Accelerators is flourishing in tier 1 cities. It is refreshing to witness that trend being reciprocated by our state Finance Minister. We will work with the Finance Ministry to best utilize the start up fund in the IT sector,” said Sheikh Imtiaz Ahmed.

Shaikh Qaiser un Nabi is CEO at Wireless Solutions Pvt Ltd, a communications solutions provider. His company lays underground fibre and has to pay Rs. 200 per meter as permission fee. “If you are a local service provider and want to put in your own fibre, just the permission fee would cost you 50 to 60 percent of your cost of infrastructure. That is huge. With the proposed waiver of that fee, the local companies can also build their optical fibre network infrastructure,” said Shaikh Qaiser un Nabi. The permission for laying fibre is sanctioned by various different authorities including Municipalities, R&B, and Beacon. Laying a single wire of fibre from Srinagar to Anantnag costs between Rs.1 crore to Rs. 1.2 crore greatly impacting the feasibility of the venture.

Inderpal Singh is CEO at Aman Technologies, an IT Systems Integrator. He is particularly upbeat about the prospect of the Joint Venture announced in the budget. The proposed initiative shall also help speed up e-governance projects in the State. “We have to iron out the specifics of this proposed JV. If we get the model right, it will be a game changer,” said Inderpal Singh.

Reyaz Ahmad Mir is CEO at CNS 24×7, the valley’s leading Internet Service Provider. CNS 24×7 serves around 600 business customers providing them bandwidth connectivity solutions. The proposed 50 percent subsidy on bandwidth connectivity for IT companies is a shot in the arm. “We serve around 15 IT companies right now, but the scope is huge. With this subsidy clause we can expand our customer base in the IT vertical which is closer to heart. I would however suggest that JAKEGA or some other agency in the government empanel ISPs or have an approved list of ISPs from whom the companies could procure bandwidth in order to avail the subsidies,” says Reyaz Ahmad Mir.


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