Bangalore’s woes could be Hyderabad’s gains

Bangalore’s woes could be Hyderabad’s gains

Daily News and Analysis


HYDERABAD: It is a battle for bits, bytes and a whole lot of cash. And the velvet gloves are off.

Rival Bangalore is facing flak from Wipro and Infosys for its deteriorating infrastructure. Sensing a huge opportunity, Andhra Pradesh Chief Minister YS Rajasekhara Reddy has asked his bureaucrats to hardsell the city to corporates.

The Reddy Administration is busy revamping the IT policy. As a first step, the IT and communications department has set up a five-member team to woo investors to Hyderabad.

“These are senior officers who have been given the target of drawing at least 10 companies each with a minimum employment potential of 1,000 each this year,” IT and communications secretary Ratna Prabha told DNA.

Each of these officers has been given the responsibility of targeting companies in specific regions in India and abroad.

And, with incentives like foreign junkets, the initiative has created a lot of excitement, says Prabha.

If the hardsell works, at least 50,000 professionals will pour into the city. Last year, more than 40,000 techies were added to the IT community, taking the total number to over 1,25,000 professionals.

What perks up Prabha is the poor state of infrastructure in Bangalore.

But still no effort is being spared. The IT and communications department is all set to kick off a roadshow in Europe and the US to market the state.

No wonder the IT industry is pleased. “Hyderabad is definitely benefiting from the flak Bangalore is getting,” says Infotech Enterprises chairman and managing director BVR Mohan Reddy. Kedarnath H Udiyavar, senior vice-president, Polaris Software, agrees: “I have heard American CIOs talking about the bad infrastructure in Bangalore.”

But experts say that it is mere wishful thinking to believe that companies will start moving out of Bangalore immediately.

“The noise made by the IT industry in Bangalore could be just posturing to get the local administration to act,” says Capt C K Veeresh, director (promotions), IT and communications.

“But the fact remains that companies have begun looking elsewhere for expansion and new projects.”

While Andhra Pradesh might be bulking up for a fight, there is no mistaking the fact that Bangalore is still a goliath. The Bangalore IT machine exported services and products valued at Rs 26,000 crore in 2004-05, according to software industry association Nasscom. By contrast, software exports from Hyderabad were just Rs 8,270 crore.

“I see no reason for Hyderabad lagging behind Bangalore in software exports,” Chief Minister Reddy told DNA. When Reddy stormed to power dislodging the IT-friendly Chandrababu Naidu, he distanced himself from the Cyberabad dream. But over time, Reddy has realised the need to rev up IT investments.

While he has kicked off an ambitious Rs 600-crore highway project, Reddy has also taken advantage of the new SEZ policy to set up a series of satellite townships along the proposed highway beginning with a 2,500-acre multi-product park and a 300-acre nanotech park.

If the Hi-Tech City project was Naidu’s visiting card to woo IT investments, the new highway is Reddy’s gateway to the digital world.