eGovernance in India

Improving eGovernance in INDIA

Small-town India joins big IT race

Posted by egovindia on November 8, 2007

Small-town India joins big IT race

AFP
[ THURSDAY, NOVEMBER 08, 2007 01:40:22 PM]

http://infotech.indiatimes.com/articleshow/2528152.cms

BANGALORE: Tirunelveli and Trichy, Durgapur and Dankuni hardly trip off the tongue of most Indian IT professionals living in the established hot spots of the information technology industry.

But these small backwoods towns have joined the race to become the next Indian IT destinations, as Bangalore and other big cities battle soaring costs, talent shortages and inadequate infrastructure.

Already IT companies are biting the bait, with leading firms such as Tata Consultancy, Wipro and HCL lining up for land in Tamil Nadu and West Bengal states.

“We are seeing a very active dispersal of the industry from the bigger to the small towns and small to even smaller,” said Kiran Karnik, president of the National Association of Software and Service Companies.

“The current will accelerate once the physical infrastructure is in place,” said Karnik, the head of India’s top IT industry body. “It will result in a more even dispersal of employment and economic development across the country.”

State governments are luring firms to the hinterland by promising quick land allotments, a vast pool of engineers, uninterrupted electricity and telecoms, good roads and air links.

They are also trying to promote a superior quality of living in self-contained residential townships at a fraction of the cost of Bangalore, New Delhi and Mumbai.

Tirunelveli and Trichy are among several locations being promoted by the southern state of Tamil Nadu.

“We are focused on building Tamil Nadu as the most preferred IT destination,” said C Umashankar, managing director of the Electronics Corporation of Tamil Nadu.

IT parks are being constructed or planned in several Tamil Nadu towns, including Tirunelveli, Trichy, Coimbatore and Madurai.

Road and air connectivity is also being reinforced in India’s only power-surplus state, which has set apart 2,340 acres of land for the IT industry.

West Bengal is also rushing to catch up, promoting towns such as Durgapur, Dakuni, Siliguri and Haldia with planned tax-free special economic zones devoted to the industry.

About 20 million square feet is also under construction in state capital Kolkata that will be ready for occupation in the next two years, the state’s information technology minister Debesh Das said.

“But we want inclusive growth that’s not just limited to Kolkata,” Das said. “We want IT to go to the small towns.”

India’s $50 billion IT industry, which employs an estimated 1.6 million people, has been largely been confined to the big cities such as Bangalore, New Delhi suburbs, Mumbai and Hyderabad.

As economic growth steams along at an annual rate of nine per cent, real estate costs have doubled in such cities in the past four years — while IT salaries have been growing at an average annual pace of 18 per cent.

Infrastructure has meanwhile failed to keep pace, with IT firms complaining of everything from traffic snarls and shortages of housing, power and water to high costs and lack of sufficient professional talent.

Tamil Nadu produces 110,00 engineers every year and most of them would rather stay within their small-town confines, said Umashankar. West Bengal projects the number of its IT employees to rise fourfold to 200,000 by 2010.

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