The southern Indian city – and Asia’s technology capital – is home to nearly 1200 info-tech firms which account for a whopping 35% of India’s software exports. These exports are expected to exceed $16 billion in 2005.
At the peak of the info-tech boom about five years ago, Koramangala, a suburb of Bangalore, was believed to have the highest density of telecom software companies per square mile in the world.
Infosys and Wipro, two of the world’s biggest software companies, are based there.
More than 200,000 people are employed directly by the info-tech firms: call centre executives, software developers, and research and development geeks.
But Bangalore’s fast deteriorating infrastructure has meant foreign investors are looking away and many leading firms based in the city are either looking to shift out or planning their new ventures elsewhere.
The city’s scorching growth rate has outstripped rising infrastructural demands; there are simply not enough roads, water, hotel rooms, electricity to service the demand.
Wipro is a software giant in India
The upshot is that getting a decent hotel room in India’s Silicon Valley is next to impossible unless a customer books months in advance, power blackouts are common, roads are gridlocked with traffic when not drowning under water during rains, and air and noise pollution is on the rise.
Many residents now want to pack up and leave.
A senior executive from a Bangalore-based multinational firm, who prefers to remain unnamed, said his company had decided to shift its latest diversification projects to the neighbouring city of Hyderabad.
“Wilting infrastructure and poor quality of life is a serious ailment that Bangalore suffers today,” he said.
He cited real estate prices, overcrowding and an inefficient transportation system as reasons behind the decision.
“Our employees can retain a quality of life, a comfort factor, that Bangalore no longer provides,” he added.
The blame game
The info-tech industry blames the politicians – especially the present state government – for ignoring the city’s plight.
But the politicians, among them former Indian prime minister HD Dewe Gowda and one of the key allies of the present state government, chide the info-tech industry for complaining too much and not giving back enough to the city that has been a lucrative base to them for more than a decade now.
“The danger is that in this fight between populist politicians and confused corporates, Bangalore may lose its edge and lose its primacy. That would be catastrophic for India and its booming info-tech economy,” says PC Gulati, a city-based analyst who has been chronicling the city’s decline.
Things deteriorated to such a level in October that NR Narayana Murthy, the chairman of info-tech giant Infosys and Bangalore’s best known global citizen, quit a government-appointed committee to build a new international airport that the city sorely needs.
Separately, Bangalore Forum for IT (BFIT) – a grouping of the city’s info-tech companies which comprises 18 major multinational IT firms including Texas Instruments, Philips, Novell, Synopsis, Hewlett-Packard and Motorola – threatened to boycott an info-tech convention in October in protest against the state of the infrastructure.
Drastic improvement needed
Last July, Wipro chief Azim Premji, one of the world’s richest men, threatened to pull his company out of the city unless there was a drastic improvement in infrastructure over the next few years.
Premji is trying to influence
“The vast majority of the people who elect the state government are from the rural areas, so we in the city don’t really have much of a voice when it comes to prioritisation of development,” said Bob Hoekstra, CEO of Philips Innovation Campus, a city-based software development operation, at a press conference recently.
It should not have been like this. A lot of infrastructure projects that were planned to take care of Bangalore’s growth have remained on paper for years.
The city is supposed to have a $280 million international airport with a 4km runway – the longest in India – and be connected to the city by a six-lane highway.
But this showpiece international project has remained on paper for the past 15 years – the loss due to delay and bureaucracy is costing the project, according to one estimate, $30,000 a day.
Plans not implemented
A $50 million highway corridor to the neighbouring city of Mysore has overshot its schedule by seven years and budget by several million dollars.
Work on an elevated four-lane 9km-long motorway in the city which was to solve the traffic problems was supposed to begin last April.
A plan for a 131km ring road, vital to decongest Bangalore, is ready to go, say officials, but land has still not been acquired to build the road.
Furthermore, a metro railway project which was scheduled for completion two years ago has seen no construction at all. The project cost, meanwhile, has leapfrogged from Rs $1 billion to $1.5 billion.
The state chief minister Dharam Singh has been promising development for some time now, but there is little activity on the ground.
A new, modern airport has still
Deve Gowda, a key ally of the state government, accused the info-tech industry of complaining too much and doing too little for the city.
“They are making such a hue and cry,” he told journalists recently.
“All we are saying is that info-tech should benefit the common man, the farmers and the poor. We have done so much for them, including giving them tax breaks.”
A senior info-tech executive agrees that this domain “is a rich man’s industry. But while there is no social obligation of the info-tech industries, many companies do maintain a certain number of jobs for local citizens”.
With info-tech giants and the government locked in a seemingly unending and ugly battle over the city’s creaky infrastructure, Bangalore’s future as the technological heart of India is now in question.