Despite the government's stand, Bangalore still gets IT

BANGALORE: The stand-off between the IT industry and the Karnataka government has hit the peak over Bangalore's failing infrastructure even as more and more new economy global companies continue to set up shop in the city.

Chief Minister Dharam Singh may find relief from the fact that India's tech capital is far ahead of other cities in the country in attracting investment. But analysts fear that the Karnataka capital may lose at least some its edge if infrastructure bottlenecks persist. If unresolved, the crisis may force companies abroad to look elsewhere in India for their operations or expansion plans.

The first to make public that it is not expanding in the city was software major Wipro. Chairman Azim Premji pointed out last year that things were turning from bad to worse. Many others including Infosys are looking at places like Chennai, Hyderabad, Kolkata, Pune and Chandigarh for expansion.

Even as cosmopolitan Bangalore became synonymous with outsourcing jobs from western economies as well as a crumbling infrastructure, many multinationals are setting up shop here largely because of the city's talent pool and presence of established tech companies (see box). "The investments are increasing. We are addressing the concerns of the industry," Karnataka IT Secretary M K Shankaralinge Gowda said.

Ironically, the city's strained infrastructure has not kept pace with the boom. The international airport project took off this year after a decade-long wait, while the Metro rail project conceived in the 1980's to beat the traffic is still marred in bureaucratic delays.

Now, when nearly 135 firms announced boycott of the flagship Bangalore IT.in event, to protest against apathy in improving the city, the Congress-JD (S) coalition seeks to turn the tables on them by a veiled threat of reservation for locals in the companies. The industry is unanimous that it will harm the image of the investor-friendly state.

"We lecture the US on outsourcing and then come out with such statements," Muhammad Sarwar, Head, Products and Outsourcing, Ionidea India, said.

Anger piles up

"We deserve proper roads for every citizen of Bangalore.''

Bob Hoekstra
CEO, Philips Software

"This (jobs for locals) is just a publicity stunt to quieten the noise by bringing politics into it.''

Muhammad Sarwar
Head (Products and Outsourcing),Ionidea

"The common citizen is disillusioned and feels that all the improvements being talked about by the government may not see the light of the day."

Atul Saran
Country Head, Electronics for Imaging (EFI India)

"There is a growing trend of companies and people opting for cities like Hyderabad, Chennai, Pune - as they've similar compensation, better infrastructure and greater affordability."

Ashish Vaishnav
General Manager , Intacct Corporation India

"The current infrastructure can withstand the growth now. But if it is not improved, the city's image for new investment will be hit."

Anant Koppar
President, Bangalore Chamber of Industry and Commerce (BCIC)