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The City of Joy gets hi-tech

Ishita Ayan Dutt & Pradeep Gooptu | August 30, 2004

For decades, the very mention of Kolkata conjured up images of unwhitewashed buildings or of colonial-era creations like the majestic Howrah Bridge or the stately Victoria Memorial.

Anyone who'd like to replace those images with newer, fresher ones should make a whistlestop trip to the bustling, glass-and-concrete, information technology hub at Salt Lake. From there the next stop on the itinerary should be Rajarhat, where Delhi-based developer DLF is spending Rs 280 crore (Rs 2.8 billion) to build a 21st century infotech park.

Kolkata has leapfrogged into the infotech era and the pace is hotting up. Take a look at TCS, the big daddy of the software services industry. It already has 3,000 people on its rolls in Kolkata and it will be adding another 2,500 by July next year.

It's the same story at Cognizant, which has put big bets on Kolkata, now the home to its second-largest development centre employing 1,750 people. Cognizant is looking at adding another 1,100 jobs in the coming months.

Others too have giant expansion plans. And the target is to add 20,000 jobs in the next 18 months' time to the now 20,500-strong sector.

"The realities on the ground are changing faster than the perceptions," says D K Chaudhuri, chief executive officer, SkyTECH Solutions, a homegrown software solutions company.

The state infotech department, once a placid backwater undisturbed by the swift-moving action of the IT revolution is now in overdrive, fielding queries from a mix of multinationals and hi-tech companies searching for new bases.

Senior officials are cagey about the future but say queries are coming in all the time. According to the city's infotech grapevine the newcomers in the near future could include GE Capital and Reliance Infocomm in the IT enabled services space.

"Setting up a unit in Kolkata is like setting up a pithead power plant -- the centre comes up where the human resource is located", says PriceWaterhouseCoopers Ltd managing director Roopen Roy who set up the city's and his company's first centre in Kolkata in the late 1980's and the first dedicated complex in the mid-1990s.

Other newcomers heading in this direction include Satyam Computers, ITC Infotech and HSBC Electronic Data Processing India, which will be setting up their centres shortly.

The fact is that ever since Buddhadev Bhattacharjee took over from the computer-bashing Jyoti Basu at Writers Building, IT and ITES companies have been flocking to Kolkata, largely at the behest of a more pro-active government.

The government realised that it had to actively woo fast-growing IT and ITES companies from around the country. And the state IT department led by minister, Manabendra Mukherjee and secretary, G D Gautama have already notched up many victories by wooing companies like Wipro Technologies and Wipro Spectramind to Kolkata.

The results are already clearly visible. There are almost 200 IT and ITES companies operating in the city. This year revenues from the sector are expected to be in the region of Rs 2,800 crore (Rs 28 billion). The state IT minister says that during a trip to Bangalore he persuaded Infosys to send a team to evaluate Kolkata's infrastructure.

Not surprisingly, the mood in the sector is upbeat and almost all companies seem to be expanding. Indu Khattar, general manager and head of Kolkata's Wipro operations says that the West Bengal government has been more helpful than any other government she has interacted with. Khattar's comments are significant because she's a Wipro veteran who has also worked in Bangalore and Pune.

Wipro has already taken 17 acres and it has room on its campus for about 5,000 people. Says Khattar: "We will populate the infrastructure as soon as possible."

Besides that Wipro is also looking at a 40-acre plot at Rajarhat, the new IT hub. Similarly, Cognizant is also looking at the option of taking new premises at Rajarhat.

The government's new attitude is also bringing in multinationals who might otherwise have steered clear of the city. HSBC Electronic Data Processing India, for instance, plans to start operations with 500 people and ramp up swiftly after that.

Niall S K Booker, group general manager and chief executive officer, HSBC India says, that the government's new attitude was a significant factor in the bank's decision to head towards Kolkata.

The arrival of a bank like HSBC is a watershed event because the first banking sector entry will attract the attention of other banks and open up new opportunities", says Roy of PwC.

"I am worried about whether the state will be able to produce trained manpower at the rate at which demand could grow. Competition for resources could erode some of the advantages," he cautions.

Even smaller companies have ambitious plans for the city. Kolkata-bred SkyTECH Solutions (a joint venture between TCG and United Airlines) is an airlines and transportation solutions provider that has doubled its numbers over the past year. It aspires to be a $100 million company in three years' time.

Of course, Jyoti Basu's "chelas" haven't vanished from the scene entirely. The government has promised that IT operations won't be disrupted by strikes and bandhs.

But that hasn't always worked in practice. Some companies like PwC, have avoided trouble by staying shut during strikes. And most 24/7 units like call centres have lost one day a year for the last two years.

Inevitably, the infotech boom is making its impact felt around Kolkata. The coming of DLF has made other builders sit up and take note of the city's new ambitions in the infotech sectors and it's very likely that more technology parks will quickly become a reality.

"Rajarhat is one of the few locations in the country which offers hundreds of acres of prime land close to a major airport", says Roy.

Is the infotech revolution having a broader impact on the city? Certainly, the economic indicators point to increased prosperity though it isn't clear how much of that can be attributed to the arrival of the tech companies.

Over the last five years, the state has been growing at 7.2 per cent. The number of vehicles on Kolkata's potholed streets has risen from 450,000 to 950,000 during the same time. Also, consumer spending has climbed and the malls are filled with people throughout the day.

The infotech chiefs still say the government should do more to project the new realities of the city. Foreign clients are still chary of moving here. To change these impressions, the government should sell itself more energetically with roadshows abroad.

Ajoyendra Mukherjee, vice president, Tata Consultancy Services suggests that the government should adopt more sophisticated techniques and focus on selling itself to analysts like Gartner who shape the minds of foreign investors.

At a slightly different level, Siddharth Mukherjee, vice president, Kolkata operations, Cognizant says that the government has made the right moves but will now have to show execution excellence. He reckons the city needs a few more anchor companies like Wipro to change fixed opinions about the city. Around 16 per cent to 18 per cent of Cognizant's revenues come from Kolkata.

What could be a weak point in all this? The city's biggest selling point is the large talent pool that's available. But, the talent is all, unfortunately, at a junior level. At the top, people responsible for building brands and turning around companies, have migrated and it's tough to woo them back.

Kolkata is, of course, still a software midget compared to cities like Chennai and Bangalore. But it would be an amazing about-face if high technology helps turn the slow-paced, growth-starved first city of the British Raj into a fast-moving thriving 21st century metropolis.

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