Taking a cue from the Central government, states have started extending sops like tax holiday, land at concessional rates, exemption from sales tax and so on. Gujarat, which announced the IT policy two days ago, is the latest to come out with incentives for IT companies.

For the first time the need to get state-wise export figures is also being felt. The Maharashtra government has asked the National Association of Software and Service Companies (Nasscom) for a such list to salvage its badly bruised image as a laggard in IT. It is also publicising the fact that 115 of the 430 top software houses are headquartered in Mumbaias against 87 in Bangalore and 37 in Hyderabad, to counter the negative image.

Until now, software industry associations did not deem it necessary to compile state-wise export figures. Doing such a study is also error-prone because nearly every major software company has development centres in more than one state. "We are trying to get something done on this front but the companies themselves do not have ready figures on the exact amount of work done in each centre," explains Lalit Kanodia, chairman (western region), Electronic and Software Promotion Council (ESP). Kanodia's own company, Datamatics Limited, has development centres in all metros. Others like Tata Consultancy Services have centres in almost every state.

An attempt to collate export figures by ESP, however, yielded Karnataka the top position followed by Maharashtra, and Tamil Nadu and Andhra Pradesh bringing up the rear for 1999-98. Andhra Pradesh recently shot into prominence when Microsoft Corporation chose Hyderabad over Bangalore tohouse its development centre. The billion-dollar software Goliath has only two other development facilities in the world. This lead to a good deal of speculation in the media that Bangalore was losing its status as the Silicon Valley of India. The Karnataka government has since become more aggressive in promoting itself.

Using the USP of the being number one it is marketing Mysore and Mangalore as alternative locations to software companies. At a recent briefing on the IT expo to be held in Bangalore, Sanjoy Das Gupta, secretary IT, Govt of Karnataka, was quick to point out that despite all the hype, Hyderabad was way behind Bangalore in exports.

Maharashtra, meanwhile, is promoting Pune as the ideal choice for IT companies. "It is close to Mumbai - the commercial capital - has good climate, a pool of software professionals... What more does a company want?" asks Suresh Wagh, joint director of industries, Govt of Maharashtra. Infosys and Wipro Corporation have already booked around 20 acres each in Puneand Datamatics is planning a 10 acre centre.

Maharashtra is also making space for software companies in crowded Mumbai. The idea is to offer an unbeatable deal and woo the big bucks back. The Maharashtra Industrial Development Corporation (MIDC) is developing two STPs -- one bang next to the Santa Cruz Export Processing Zone (SEEPZ) in the heart of the city and another at Airoli in Navi Mumbai. "We are giving away space for Rs 1,300 per sqft (in Airoli). The same space costs Rs 2,800 in Hyderabad Hitec City and Rs 4,800 in Tech Park Bangalore," says A Ramakrishanan, CEO, MIDC.

IT companies are not complaining. Till sometime ago, the government paid scant attention when they clamoured for more space at SEEPZ. Now there are entire polices devoted to IT. "It has caught everyone's fancy," agrees Kanodia who lists the over 50 per cent export growth of the sector as one of main reasons for this. The prospects of the industry are still bright and the country has software competence. Besides, the capital toemployee ratio is far lower compared to heavy industries like petrochemicals, meaning more jobs are created for the same investment. "It is in the national advantage to promote IT," concludes Kanodia.

There might be unexpected pay-offs too. Like the slack domestic market might finally take-off. The IT policies outlined by the states provide for computerisation of government departments, computer labs in schools, and electronic kiosks. India cannot make its mark as infotech power unless it has a sizable domestic market. So far, the contribution of the domestic market to the total revenues has been lesser than that of the export market.

This might change once the IT policies take concrete shape. According to Phiroz Vandrevala, executive vice-president, every state should have an IT policy and competition will only make things better." Satyam Computer Services, one of the top ten exporters and among the earliest to set up in Hyderabad agrees. And having an IT savvy chief minister definitely helps.

Tounderstand why, check out the websites of the three states--andhrapradesh.com, karnataka.com, maharashtra.com. Andhra Pradesh has a comprehensive section devoted to Information Technology, Karnataka's site has a couple of stray links to articles on IT, and an "Under Construction" sign greets visitors to maharashtra.com.