STPI refutes: `More firms set up shop'

Bangalore losing out on IT investments, says Chamber
STPI refutes: `More firms set up shop'

The Hindu Business Line

IS Bangalore losing its appeal as the preferred investment destination for technology companies?

Yes, says the Bangalore Chamber of Industry and Commerce (BCIC), an apex industry body representing the interests of medium and large companies in Karnataka. However, statistics from the Software Technology Parks of India belie the BCIC's claims.

The BCIC, in the context of boycotting this year's technology event - BangaloreIT.in - in a release on Friday said: "The slowdown is already evident with the dwindling number of software firms choosing Karnataka as their preferred destination. Statistics reveal that as few as 30 new companies set up their operations in 2004-05 compared to 52 in the previous year."

However, the STPI statistics actually show an increase in the number of new companies registered in Bangalore.

Against 168 new companies that set up shop in Bangalore in 2003-04, the city attracted 198 new firms in 2004-05, an 18 per cent increase. Bangalore had attracted 116 new companies in 2002-03.

Further, the city attracted 65 new technology companies with a total investment of Rs 900 crore in the first four months of the current fiscal, a 20 per cent growth over the corresponding period last year, STPI officials said.

Of the 65 new companies, 45 of them are 100 per cent foreign equity owned. There are close to 1,600 technology companies operating from the city.

BCIC said that its boycott of BangaloreIT.in was over the State Government's apathy towards improving the city's infrastructure, especially in areas of traffic congestion, power shortage, and airport infrastructure, among others.

"The State Government's lack of concern has subdued not just the IT industry pace but has affected all industries and more severely the society," BCIC said in the release.

BCIC also said that unless there is tangible and visible improvement in infrastructure facilities, MNCs would be driven to taking their expansion strategies to other States and even other countries.

BCIC's decision to boycott BangaloreIT.in follows a similar threat from entities such as Bangalore Forum for Information Technology, which recently announced its decision not to participate in this year's event scheduled to be held from November 1-5.