Government of India, dominated and controlled by Hindi politicians, is literally choking Tamil Nadu software industry (information technology industry) and stunting its spectacular growth, thus putting roadblocks on better wages for Tamil Nadu software professionals and better future and living standard for all the people of Tamil Nadu.

India Tamil Nadu software industry (computer information technology IT)

Indian Government Chokes Software Industry in Tamil Nadu

Thanjai Nalankilli

TAMIL TRIBUNE, March 2001 (ID.2001-03-01)

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IT - Information Technology


Hindians: People whose mother tongue is Hindi (similar to Tamil speakers are sometimes referred as Tamilans or Tamilians).


1. Introduction

2. Indian Government and Industrial Growth in Tamil Nadu

3. Software Industry in Tamil Nadu

4. Tamil Nadu and the South Discriminated in Software Infrastructure

5. Airfare Discriminations of the 1980s

6. A Final Note 


1. Introduction

The Government of India, dominated and controlled by Hindi politicians, is at it again. About a year ago they forcibly imposed a sales tax structure on Tamil Nadu, against the wishes of Tamil Nadu business and government, that threatens the spectacular growth of Tamil Nadu computer software industry (information technology industry (IT industry)) (see: Indian Government Interferes in State Sales Tax (by V. P. Govindarajan), TAMIL TRIBUNE, March 2000). Now it is further stunting the growth of this industry by limiting "bandwidth" availability in Tamil Nadu. We will explain what we mean by "bandwidth availability" later. Let us put everything in proper perspective first.

2. Indian Government and Industrial Growth in Tamil Nadu

Ever since the British colonial rulers left South Asia in 1947, government of the independent India fell into the hands of Hindi politicians because they form the largest group in the Indian parliament and thus dominate and control it (see: Who Rules India? (Part I) (by Thanjai Nalankilli), TAMIL TRIBUNE, November 2000). Starting from the 1950s, the Indian Government used a centralized, government-controlled strategy for industrial growth. Heavy industries like steel, manufacturing and petrochemical plants were setup by the Indian Government itself or by a few large industrial firms through a permit system. The Indian Government saw to it that much of the heavy industry was thus located in the north-central states (known as the Hindi belt) and a few western states that are closer geographically and ethnically to Hindians. Northeast and the south saw very few of these heavy industries. 

Government control and permit system of industrial development changed starting from the 1990s (lesser government). The late 1990s also saw the emergence of information technology (computer and software industry) as the thing of the 21-st century. Future economic growth and prosperity belonged to countries that develop advanced software for the information technology and computer industries. India came through as a major player in the software industry with much of this industry located in southern states. 

3. Software Industry in Tamil Nadu

(NOTE: What we are discussing here about Tamil Nadu is also true for other southern states like Andhra Pradesh and Karnataka with a heavy concentration of software development (information technology development) centers.)

Tamil Nadu's success in the software industry is due to the availability of a large pool of educated work force (trained information technology professionals) and the progressive policies of the Tamil Nadu state government (This is true for Andhra Pradesh and Karnataka also). Unlike in the government-control and permit-system era of the 1950s through the 1980s, when the Hindian dominated Indian Government took every state's tax money (including the northeast and the south) and poured it into the building of heavy industries in the Hindi belt and some western states that are ethnically closer to them, the 1990s software industry in the south developed due to local talent, local entrepreneurship and local (state) government policies with respect to sales taxes, incentives, etc.

This does not mean that there is no indirect involvement of the Indian Government. Remember that it is the Indian Government that collects the giant share of taxes in every state. Indian Government has an indirect impact and influence on industrial development in every state because industry, whether it is heavy industry or light industry, hardware industry or software industry, depends on the necessary infrastructure. Infrastructure development is the duty of the government. Because the Indian Government collects much of the taxes, it befalls on the Indian Government to provide much of the infrastructure needed for industrial development.

4. Tamil Nadu and the South Discriminated in Software Infrastructure

Roads and rail lines are the primary infrastructure needed for hardware industries to bring in raw materials to manufacturing facilities and to take out manufactured products to markets. Ports and harbors are also needed if foreign is important. Infrastructure needs for the software industry is different. What is needed is a network of cables to transmit information and software. A cable network within the state and country satisfies infrastructure needs for local exchange of information and software. Tamil Nadu software industry is export based (true for other southern states too). In the same way as ports and harbors are the lifeline for export/import of manufactured products, software industry needs high-speed underwater cables to overseas clients. It is the Indian Government's responsibility to build these underwater cables because it is collecting bulk of the taxes from Tamil Nadu and other states. 

The amount of data that can be transmitted through cables depends on the type, size and number of cables, in the same way as the amount of goods (hardware) transported depends on the number of roads and rail lines. The amount of data that can be transmitted through the cable system is called its "bandwidth". Currently Tamil Nadu (as well as other southern states) is short of overseas bandwidth. This shortage will soon choke the growth of the software and information technology industry in Tamil Nadu and the south because the industry depends on foreign clients. 

Those who are familiar with how the Hindian controlled Indian Government discriminated Tamil Nadu and many other non-Hindi states in heavy industry development may not be surprised that while there is shortage of much needed bandwidth in Tamil Nadu and the south, Indian Government has built excess bandwidth in the north (where the Hindi belt is). A calculated discrimination again against Tamil Nadu and the south.

Much of India's foreign exchange earnings from the software industry (information technology industry) comes from the southern states of Andhra Pradesh, Karnataka and Tamil Nadu. You would expect the Indian Government to build the necessary bandwidth in the south. No, instead it built additional bandwidth in the north where Hindians live and work. Is it not outright step-motherly treatment of the non-Hindi southern states?

5. Airfare Discriminations of the 1980s

This reminds me of the airfare structure set by the Indian Government owned Indian Airlines and Air India back in the 1980s. At that time these two were the only domestic airlines ; there was no competition from domestic private airlines and these Indian Government owned airlines felt free to set up airfare that discriminated against the southern air routes and benefit the northern air routes that are obviously more used by Hindians.

During the 1980s many Indians went to work in the oil-rich Arab Gulf countries. So the Indian Government owned Indian Airlines and Air India had direct flights from Bombay (now called Mumbai) because it is a major business center. They also had direct flights from the southern city of Trivandrum (now called Thiruvanathapuram) in Kerala.  The reason for direct flights from Trivandrum was that the vast majority of Indian workers in the Arab Gulf countries were from the south, especially Kerala. Almost all the Trivandrum-Gulf flights were booked full whereas there were plenty of empty seats in the Bombay-Gulf flights. Also flight distance of the Bombay-Gulf route is higher than the Trivandrum-Gulf route. So it is rational to expect the Trivandrum-Gulf airfare to be less than the Bombay-Gulf airfare. But that was not the case. The Indian Government set the former fare higher than the latter. Why? Hindian workers in the Arab Gulf countries travel via Bombay whereas non-Hindi Keralites and other southerners travel through Trivandrum. This was the reason for the irrational airfare structure set by the Hindian dominated Indian Government during the 1980s. In essence, non-Hindi Keralite travelers were subsidizing Hindian travelers. The same thing is happening today in Year 2001. Southern states are generating foreign exchange from software exports and the Indian Government is building excess bandwidth in the Hindian north while there is shortage in the south. 

Is it any wonder that non-Hindi nationalities like the Sikhs, Assamese, Kashmiris, Tripurans, Nagas, Mizos, Manipuris and Tamils are clamoring for independence from the Hindian dominated "Indian Union"!

6.  A Final Note

A study in the late 1990s concluded that, if they were left to their own economic development after the British left South Asia in 1947 (that is if the Indian Government is not taking away the bulk of the taxes), non-Hindi states like Punjab, Maharashtra, Andhra Pradesh, Karnataka, Kerala and Tamil Nadu would have attained a standard of living comparable to Malaysia by now.

Post Script:

In a late development, Tamil Nadu State Government is considering the funding of an overseas cable system from Chennai (Madras) to Singapore because of Indian Government's refusal to build such a system. We thank the Tamil Nadu Chief Minister Karunanidhi for it. But it is an unfair deal for the people of Tamil Nadu. It is in a way double payment. Indian Government takes vast amounts of taxes from Tamil Nadu software industry and is not using it for the necessary infrastructure (underwater cables) we need. Instead we are paying the bill for the underwater cables through our state government while the Indian Government uses the taxes from software industry in the south to build excess infrastructure in the north.  Had the Indian Government built the much needed underwater cable system, Tamil Nadu State Government would not have to fund it and those monies could be used to reduce sales taxes, improve our educational system, healthcare system, food distribution/subsidies, state highways and local roads, water supply and sanitation systems, etc. But, alas, we are short-changed again by the Hindian dominated Indian Government.

We were discriminated from the 1950s to the 1980s in heavy industry development and now we are short-changed in infrastructure development for the emerging software industry too! Indian Government's policy with respect to sales tax and now infrastructure development are discriminatory and are stunting the growth of our software industry and thus blocking rapid economic growth, increases in wages for Tamil Nadu software professionals and improvements in standard of living for all the people of Tamil Nadu.


1. Indian Government Interferes in State Sales Tax (by V. P. Govindarajan), TAMIL TRIBUNE, March 2000 (10 KB)

2. Who Rules India? (Part I) (by Thanjai Nalankilli), TAMIL TRIBUNE, November 2000 (44 KB)

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