A Blueprint For Bengal

After the clipping West Bengal chief minister Buddhadeb Bhattacharya got on
the Infocom 2002 event dais in December, for his talk about being "slow and
steady" in joining the IT and ITeS bandwagon, it’s time to put Kolkata’s
e-readiness under the scanner.

Yes, the state lost the IT race to its Southern rivals in the 1990s. But
Kolkata is now more serious about finding out why–and filling the gaps–than
it has been in the past ten years. Most agree that the state government has done
precious little in this sector so far, but some say all its unhurriedness and
caution over the past couple of years may actually help the state today. ‘It
was worthwhile to wait and watch after IT firms worldwide bit the dust in the
wake of the IT meltdown and the dotcom bust. Now is the time to take the right
decisions,’ says an industry person.

So even if you dismiss West Bengal’s IT revenues in 1996 as negligible, the
114 per cent annual growth (CAGR) from that year onward, for five years until
2001, is good. A Nasscom survey on the competitiveness of nine cities as a
destination for IT-enabled services has ranked Kolkata fourth. The state
government claims it has the best package of incentives among Indian states,
with up to Rs 1.5 crore as capital investment subsidy and an interest subsidy of
up to Rs 1 crore for five years. According to the buzz in the corridors of
Writers’ Buildings, the first file signed by ‘Buddha babu’ after taking
over as chief minister in November 2000 was land allotment to Wipro for its Rs
50 crore project. And in the next week, he cleared the Saha Institute’s
Medical Cyclotron project.

Three years ago, the state government had appointed McKinsey & Co as
consultants, to prepare a development roadmap for the state with IT as a big
growth driver. Now, the government is trying to follow the McKinsey
prescription. The government-McKinsey team, during the course of the investment
promotion initiatives in the recent past, had meetings with 36 investors across
five cities. Of these, 13 proposals are reported to be in ‘serious dialogue’
stage with GE, ICICI, ITC Infotech, Unilever, TCS, Cognizant, Reliance Infocom
and Daksh software, among others.

One key need is to have ‘anchor firms’ setting up in the state. This ‘action
point’ is under way, with some prospects having firmed up their investment
plans. Some, such as TCS, Cognizant and PwC, have already been in the state for
long. Other relationships and projects are under way:

n A tie-up with
Microsoft for the state’s WAN connecting the government secretariat and
district headquarters, as a base for e-gov.

n A broad-based
relationship with IBM. Apart from IBM’s plans with PwC (which it now owns), it
will participate in computer education in primary and higher schools, and in
e-governance initiatives. IBM will also offer advice for the growth and
development of the state-run Indian Institute of Information Technology,
including designing software for the IIIT syllabus, and set up of Centers of
Excellence at IIIT and Jadavpur University. Other partners for education include
NIIT, and Wipro.

n GE’s fifth BPO
location in India is very likely to be West Bengal, though plans and dates are
not firmed up.

n Wipro is setting
up a software center on 12 acres of land in the Salt Lake Electronic Complex
with an initial investment of Rs 50 crore and a capacity to employ 2,000 people.
This is under way.

n Spectramind, now
part of the Wipro group, in "actively evaluating" West Bengal as a BPO
location. Its founder, Raman Roy, is the man who set up GE’s call center
operations in India.

n The Reliance Group
plans a ‘Dhirubhai Ambani Institute of ICT’ in Kolkata. Talks are also on
for setting up a 500-seat call center, a telecom engineering center with R&D
facilities, and a 100-acre ‘Knowledge City’.

West Bengal’s IT Secretary D P Patra says that investors are now getting
excited about opportunities in Kolkata. "Look at the investment plans of
Wipro, Spectramind and Microsoft," he says. "We’re seeing a second
spate of investments now, after 1995. And all of them are IT-related. These
concrete proposals speak for themselves."

McKinsey has advised the state government to deal with these early investors
with kid-gloves, as they will be the primary large investors in the state–and
much will depend on their experiences in the state to attract further investors,
and an environment for IT growth.

McKinsey has listed a range of problems: poor image, inadequate
infrastructure, especially communication, lack of qualified graduates and
engineering colleges, poor marketing, and low initiative and motivation of local
entrepreneurs. It has suggested action points, and the government has, for a
start, allowed private participation for creating more engineering colleges.

McKinsey has pointed out that to meet the state government’s 2010 targets
(a 15 % of India’s software exports pie, 25 % of all product
development/research and outsourcing, and 5-10 % of domestic software services)
infrastructure needs to be quickly ramped up for manpower training and
development. The state will have to produce 30,000 engineering graduates from
2005, a more than tenfold increase from today! For ITeS, some 230,000 graduates
are required around year 2006, of which 65,000 must be from the commerce stream.
The state government has also introduced basic computer education in 100 higher
secondary schools, with the help of NIIT and Webel. The next batch of an equal
number has been taken up by Wipro and Webel. A third batch is slated to be taken
up by IBM and Webel.

Meanwhile the state government is scouting for tie-ups with the Birla
Institute, IMT (Ghaziabad), the Apeejay Institute of Technology in Delhi,
Reliance (for a Dhirubhai Ambani Institute of ICT) IIM Kolkata for churning out
trained manpower to drive the future IT dream machine. For this, it has
earmarked 200 acres of land at Rajarhat. The ICT infrastructure is coming up.
Reliance is laying an optical fibre network. And to tap Bharti’s Chennai-Singapore
undersea link, a Kolkata-Vishakapatnam link is coming up.

The state government’s goal and vision: to rank among the top three IT
states in India by 2010. That’s not easy. The others won’t be sitting still.
Bangalore, Chennai, Delhi, Gurgaon, Hyderabad–they’re bigger, and they’re
moving forward too.

Kolkata’s "slow and steady" approach is not going to easily win
this race. It will be an uphill road in 2003, but the first steps have been
taken.

Shehla Raza Hasan