Bhubaneswar, April 5: The software industries in Orissa have suffered a set back after a leading software company Mind Tree had intimated its decision to pull out from its Orissa project.

In January, the Orissa government asked the company to start the project.

The company had signed an MoU with the government in 2006 to start the project which could have provided employment to people between 1,000 and 1,500.

The government was to provide 20 acres to the company in Info City (I) in the Chandrasekharpur area.

According to sources, the company now asked the Orissa government to refund its surety money that it had deposited for the land which was to be made available for the project.

The government had agreed to provide 20 acres to the company for setting up a software development and hardware design centre and related activities in multiple phases.

However, the company had asked for 30 acres.

According to the MoU, the Mind Tree was to start construction within 12 months. As the government had failed to provide the required land, the Mind Tree has pulled out.

Sources said that as per the Centre’s special economic zone (SEZ) policy, a software company would only avail the benefits on income tax relaxation and other form of benefits if it starts its operation by 2014.

“As the company feels that it will not be able to resume its operation in a full-fledged manner by 2014, it has decided to pull out. Government has no fault in this case,” said a senior official of the Orissa government.

Information and technology minister Ramesh Chandra Majhi said the government would ask the company again to reconsider its decision of pulling out.

The government has asked the two other top IT companies — K Raheja Groups and ICICI Bank — to set up software parks in Orissa.

“Land for the K Raheja group is ready. The government is in constant touch with them. They have assured to resume their operation post-April. Regarding project of the ICICI bank, a meet will be held. The government wants the bank to set up its operation,” the officials said.

The Orissa government has allotted 12 acres to the ICICI Bank to set up a hub for the entire eastern region to house call centre, back-office operations as well as sales and administration for the ICICI Group.

It envisages staffing of 5,000 people by 2011 in Phase-I. Subsequent expansion is planned in a phased manner to add 1,000 to 1,500 persons per annum.