Kerala is no more a favourable destination for IT companies?

Kerala is no more a favourable destination for IT companies, according to V K Mathews, Chairman & CEO of IBS Software, one of the leading IT companies based at Technopark here, which provides technology solutions for travel, transportation and logistics to more than 100 companies across the globe.

Talking to reporters here on Friday, he said that unless there was a concerted effort from the political leadership, investors would look for better options in neighbouring states.

“Compared to Chennai and Bangalore, Kerala has become 50 percent more expensive on rentals alone. The 10 percent advantage in manpower costs is not sufficient to offset this. Operational costs are shooting up. We do not have any factor to attract prospective investors. To add to this, negative factors like political interference is on the rise,’’ he said. He warned that unless there was a comprehensive initiative to change the negative perception and to bring down operating costs, the state would find it difficult to find takers for the one million square feet of IT/ITES space that is coming up.

“The state is way behind its neighbours in software exports already. While Karnataka has exports worth Rs 40,000 crore, Tamil Nadu Rs 30,000 crore and Andhra Pradesh Rs 20,000 crore, Kerala can boast of hardly Rs 1,200 crore of exports,’’ he said.

He said that there has to be better awareness among the public and politicians about the IT industry, its needs and sensitive nature.

His comments were in the backdrop of the controversy that arose following the performance based retrenchment of 27 employees of IBS. He said this was only a performance based HR exercise and it happens on a regular basis in the IT and related sectors the world over.

“There is a lack of understanding and awareness about the IT industry. A certain amount of churning, turn over and realignment keeps happening in the sector and it is good for the industry,’’ he said.

He suggested that the government should grab the opportunity offered by the global economic crisis. Businesses would be looking to relocate to lesser expensive destinations, he said.

“We should try and attract these investors by making attractive offers like free electricity and 50 percent reduction in rentals. The IT industry should also be exempted from hartals and strikes. Create a conducive environment to ensure we don’t drive business away,’’ he said.

(source:expressbuzz.com)