Banks, FIs told to seek new ways of financing software, ITES cos

Updated: Feb 21 2002, 05:30am hrs
Indians banks and financial institutions should work out innovative methods of financing software and information technology-enabled business ventures.

This was the line taken by Planning Commission deputy chairman K C Pant in New Delhi on Wednesday while inagurating the two-day IndiaSoft 2002 conference and exhibition.

“A major constraint to even faster growth of our software and IT-enabled services (ITES) sectors has been access to sufficient financial resources. Since collateral-based lending has only limited applicability in these sectors, innovative methods of finance have to be developed,” Mr Pant said.

“Collateralisation of future income streams has started to gain momentum in India and as the banking sector becomes more comfortable with this system of financing, the impending problems of the software sector would ease significantly,” he said.

Mr Pant said that there was a great deal of talk about the digital divide and it was a reality. “We have, therefore, proposed a Convergence Bill, which, among other things, seeks to bring about broadband connectivity through a range of options. Hopefully, we will succeed in our endeavour,” he said.

With the passage of time, the necessity of broadened connectivity was bound to increase, Mr Pant said, adding, “The digital divide will only grow if we can not provide such facilities to our people expeditiously.”

“Despite the trebling of telephone penetration during the last decade, perhaps only about 10-15 per cent of the people are electronically connected. Even those who are connected, have access to a relatively low quality of connectivity,” he pointed out.

“Our ability to tap the international software and IT enabled services markets will depend largely upon the success we achieve in providing the requisite infrastructure, particularly in telecommunications,” Mr Pant said.

“My main concern is really the domestic market. Application of IT for improving the quality of life of our own people and efficiency of enterprises is just as important as the foreign exchange that is earned through its export,” he said.

India to set up STPs in Indonesia
Our eFE Bureau in New Delhi

India is going to set up satellite technology parks (STPs) in Jakarta, Bandung and other Indonesian cities.

As a part of this initiative, an agreement was signed between the Indonesian Computer Software Association (Aspiluki) and Electronics and Computer Software Export Promotion Council (ESC) at Indiasoft 2002 on Wednesday, in New Delhi.

ESC vice-president PK Sandell and Aspiluki vice chairman Djarot Subiantoro signed the joint action program. The agreement was signed in the presence of the Indonesian Minister of Industry and Trade Rini MS Suwandi.

ESC and Aspiluki will come together to set up pilot projects for joint ventures between Indian and Indonesian small and medium IT companies.