Destination Kolkata: CA-TCG Software's office at the Bengal Intelligent Park

Scene I: You could be forgiven for mistaking IT for the corporate office of a large, eco-friendly denizen of India Inc. The large, well-lit marble lobby is tastefully done up with ethnic paintings and handicrafts. Spiffy chrome and mirror-lined elevators zip you up to the seventh floor where a broad marble corridor leads you, past a flight of gleaming marble stairs, to the Information Technology Department of the state government. Best of all, there are no pesky petty officials to bog you down and keep you from your business.

Scene II: Cut to Saturday afternoon. It's the beginning of the weekend and IT developer Kiran Balimane, his wife and four-and-a-half-year-old son are among a throng of people waiting for a table at a hot, new generation restaurant on the fourth floor of a futuristic shopping mall. The place is choc-a-bloc with guests. There's just 45 minutes left for the matinee show of Khakee at the multiplex within the mall complex. The Balimanes decide to skip the fine dining experience for the day and head for the food court a floor above to catch a pizza before heading for the movie.

Scene III: It's late evening on Saturday. There's a line of cars half a mile long, moving slowly forward, disgorging guests in front of a tony hotel. The crowd, comprising young and not so young couples-many of them software developers-is headed for the disco in the basement of the hotel. It's all a one-way movement. Inwards. And there they will stay till the wee hours of the morning- drinking, boogieing and networking away the stress of the week just gone by.

Where do you think these scenes are being enacted? Bangalore? Hyderabad? Chandigarh? Guess again... it's good old Kolkata, where the Marxist leopard is changing his spots. And laying out the red carpet for the information technology sector! At last count, there were about 185 IT companies, employing more than 15,000 professionals operating at the Salt Lake STP in Kolkata. Most of the biggies are here: TCS, IBM, PWC, Skytech Solutions, Wipro, Satyam... you name the company and chances are that it's here. If it's not, it's probably waiting while the government processes its application to stake out the land here. And the numbers are beginning to stack up. The state exported IT products worth Rs 1,200 crore last year. Small beef, you might say. But hold on, there's more: The state has set a target of ratcheting up it revenues aggregating 15-20 per cent of the national average by 2010, up from 3.5 per cent now. "It's ambitious but achievable," says West Bengal's IT minister Manabendra Mukherjee.

The Kost Factor

For an industry that's supposed to throw geography into the dustbin of history, the reasons for converging in Kolkata are remarkably mundane: lower costs, access to a large pool of trained manpower and, of late, a government that has woken up to the potential of information technology and the virtues of private enterprise.

"Cost is a major factor," says Rathin Dutta, Chairman and CEO of PricewaterhouseCoopers Pvt Ltd (PWC), commenting on the sudden appearance of Kolkata on the country's IT map. "Land, and consequently rents, in Kolkata is still a lot cheaper than in other cities. Manpower, too, costs at least 20 per cent less here compared to, say, Mumbai or Delhi," he says. And attrition rates are much lower too. A Kolkata techie is unlikely to jump ship for a few hundred rupees more per month. Adds Rajarshi Sengupta, Executive Director, PWC: "In this sector, where human capital is the principal resource, that's very important. And in which other city would you find an IIT, an IIM and an ISI, not to speak of other reputed institutions like Calcutta University, Shibpur Bengal Engineering College and Jadavpur University?" IIT, Kharagpur, is two hours away from Kolkata but that slight distance is immaterial in the context of the issue, he feels. A November 2003 study by a consulting firm of ITes locations in India ranked Kolkata and Chennai as the cities with the highest skills at solving IT problems.

The easy availability of qualified personnel is a major selling point for the state. According to Siddhartha Mukherjee, Vice President of Cognizant Technology Solutions India, this, and the "significantly lower" operating costs, is what drew his company here.

Point taken. But these advantages existed in the past as well. How come the IT industry remained stillborn in the city till recently? Two things have happened. "The perception about West Bengal is beginning to change," says D.K. Chaudhuri, CEO of Skytech Solutions, a joint venture between United Airlines of the US and Purnendu Chatterjee's TCG. "More people are now willing to look at the state as an investment destination." And that brings us to the other reason: government policies that create an enabling atmosphere for businesses to thrive in. "The state suffers from a positioning problem," says Cognizant's Mukherjee, "and the government has only now started putting in place the machinery to tackle this."

"Radical change is the key when you're out to change perceptions," says Dutta. "We should look at the chief minister exempting the IT sector from the purview of bandhs in this context." He was referring to the Buddhadeb Bhattacharjee government's decision to notify software development as an essential service-the only state to have done so. "Pictures of the IT crowd gorging away at Red Hot Chilli Pepper (a popular restaurant in the Salt Lake Electronic City) in the next day's newspapers created the right kind of splash," says Sengupta. A lot of this good work was undone by the second bandh in February, but government officials say things will improve in future.

State Of Mind

The state, too, is keen to put its best foot forward. "We want to leverage West Bengal's obvious advantage as a knowledge destination. Our goal is to turn the state into the preferred IT destination not only in India but also in the whole of Asia and the world," says Mukherjee, who, incidentally, is the only MBA in the state Cabinet. "The government is committed to creating an enabling atmosphere where knowledge workers and companies can thrive." As a first step, the IT department has moved into a new office on Camac Street in downtown Kolkata. And it's unlike any government office that the state has seen before: This correspondent reached the IT secretary's office without encountering or being stopped by a single person. "A corporate ambience is essential for success. Investors must feel comfortable doing business with you," says Dr G.D. Gautama, Principal Secretary, Department of Information Technology, Government of West Bengal, who holds a PhD in optical fibre communications from IIT, Delhi.

By the looks of it, the state has begun to get its act together. "We found the government responsive. When we were starting out in 1996-97, it really expedited things for us," says Cognizant's Mukherjee.

"Seeing is believing," says Gautama. "When we approach prospective investors, we ask them to come and see the place for themselves... we ask them to talk to those who're already here. It's only then that they realise that the negative perceptions about the state are not borne out by ground realities."

Dutta agrees. "Kolkata offers facilities that are as good or as bad as those in Bangalore, Hyderabad, or any other Indian city," he says. Incidentally, it was PWC that pioneered the tech sector in the state when it opened its development centre in Salt Lake in the mid-nineties. Adds Cognizant's Mukherjee: "Several of our clients who conducted due diligence-and applied very exacting international standards-on our facilities here returned satisfied. And Salt Lake is very close to the city proper. So, unlike in other cities, knowledge workers don't have to commute large distances to get to work. From an operational perspective, there are hardly any downsides to doing business here."

Rajeev Goswami, CEO of CA-TCG Software (CATs) says: "We're doing high-end product development work here and face no obvious problems." Most people abroad don't know much about Kolkata. "It's a throwback to the days when Americans thought Indians rode only elephants and lived on trees," he chuckles.

Chaudhuri, however, feels that the social infrastructure must improve. "We need more malls, pubs and hangout joints that youngsters typically want nowadays." He accepts that things have improved in the past five years but says much more needs to be done.

But Cognizant's Mukherjee has a different take on this. "Social infrastructure is not an issue now. At least at Cognizant, we've never faced a problem getting someone from, say IIM-A or B to relocate to Kolkata."

The CAGR of software exports from Bengal between 1996 and 2002 averaged 90 per cent

"But seniors still think hard before relocating to Kolkata," adds Goswami. "Getting your children into good schools is a big hassle here." But this particular problem plagues parents all over the country and is not peculiar to Kolkata.

PWC's Sengupta points to the city's vibrant club culture. "Where else in India can you get this?" he asks. "Add to this the numerous good schools, colleges, hotels, restaurants, pubs, night clubs, health spas, and coffee bars and you have everything that an upwardly mobile techie wants in terms of social infrastructure and after-office-hours entertainment options." He, too, accepts that more would be better but feels what's available is adequate. But there are downsides as well. Frequent bandhs and work stoppages create roadblocks to a hassle-free work environment. "Even though IT establishments are exempted from the purview of bandhs, commuting to work becomes an issue," says Cognizant's Mukherjee, adding: "Attendance on bandh days is definitely lower than on regular work days." And arranging transport for hundreds of techies on bandh days poses huge logistics problems.

There are other irritants, too. Ankur Basu, a project manager at cats, is upset at the state government's decision to levy a five-year tax on cars. "Most techies don't stay at one place for five years. Yet we have to pay the five-year tax. It's enough to turn you off the place."

Skytech's Chaudhuri also feels there are philosophical issues involved. "I'm not sure what's lacking here..., he says, "Perhaps it's ambition and vision... or the ability to look at the bigger picture. Why else has Kolkata not been able to produce a Narayana Murthy or an Azim Premji of its own?"

Gautama accepts that there are shortcomings but says the government is serious about addressing them. "We're late starters in the IT race," he admits frankly. "So we have charted a plan to move forward aggressively into a leadership position in this sector." His department has unveiled a single-window clearance mechanism that hand-holds every investment proposal from conceptualisation to commissioning. "West Bengal has a very favourable ITes policy with reportedly the most favourable fiscal incentive package in India," the Hewitt study says. "There's tremendous competition among the states to attract investments. So unless we differentiate ourselves and offer something more, we'll be left behind," Gautama says, displaying the government's new-found sense of pragmatism. "A huge amount of money is going around and, fortunately for the state, we're now getting a fair slice of it." There's money flowing in all right, making the Software Technology Park (STP) in Kolkata the fastest growing in the country. The compounded annual growth rate (CAGR) of software exports from the state in the 1996-97 to 2002-03 was 90 per cent.

The figures are impressive but measures growth from a small base. As it grows and consolidates in the city, this kind of Mach-level speeds may be difficult to maintain. But that isn't worrying the state IT department. Minister Mukherjee and mandarin Gautama are focused on their targets and are busy charting plans to achieve them. The game, set and match point is still some way off. For now, it's only Advantage Bengal.