Chief Minister V.S. Achuthanandan addresses party workers (above) and protesters vent their ire at Coca-Cola

SEPTEMBER 11, 2006
6 p.m. Technopark, Thiruvananthapuram

Fifteen kilometres from the secretariat, where the 84-year-old Chief Minister V.S. Achuthanandan works from a large, sparsely decorated high-roofed office, Kerala's growing it prowess is in full display. Hundreds of techies who work in the air-conditioned offices of it companies in the 147-acre campus are heading out for the day, some to the buses and cabs that will take them home and others to the food court for a leisurely coffee. This is the new and pro-business face of Kerala, where every large it czar is queuing up for space to escape the unmanageable growth of larger cities such as Bangalore, Delhi and lately Chennai. Land rates and rentals are low and traffic is almost non-existent compared to the hour (or more) that most code-jocks spend in Bangalore's rush hour traffic. "Kerala is the best place to work in the country," declares V.K. Mathews, a home-grown entrepreneur who has seen his software product company, IBS, survive two meltdowns (first the tech bubble burst and then 9/11) and has just seen his headcount cross 1,000 a few days ago.

It isn't just local entrepreneurs heaping praise on Kerala's growing it prowess, but multinationals too are queuing up for space in the already choc-a-bloc Technopark or to set up independent campuses in its vicinity. "Kerala's reputation has improved dramatically since we opened here in 2003 and facilities here are comparable to the rest of the country," says Rakesh Kumar Gupta, coo, Allianz Cornhill Technology India, a captive it and BPO centre for the UK-based insurance giant. But there's trouble brewing elsewhere in the state. Coca-Cola (whose bottling unit in North Kerala was shuttered 30 months ago) and Pepsi have both had their flagship colas' sale banned (both are appealing), and tech giant Microsoft is on the verge of being shown the door in favour of free software. "Both Pepsi and Coke had pesticide levels 30 times the permissible limit and we banned their sale to safeguard public health," Vishwas Mehta, Kerala's Health Secretary, tells BT. The cola companies have a different story to tell. "We have the same uncompromising commitment to product safety and quality in our beverages in India that we offer around the world," says Vikas Kochhar, a Coca-Cola India representative.

While Achuthanandan may have a long-standing dislike for cola giants and seems to have entered into a very personal battle against them, the opposition has been quick to pounce on the LDF administration's shortcomings. "The current government is self-contradictory and is unwilling to explore new ideas for the betterment of the state and its people," thunders C.P. John, who heads the Communist Marxist Party, ironically one of two left-leaning parties in the opposition United Democratic Front. "We are all for investors as long as there is a benefit to the people of the state, but we will not allow people to use the state's resources for their personal gain," Achuthanandan tells this writer in his Secretariat office.

Kerala's Industries Minister, Elamaram Kareem (left), says that the state is not anti-business, and indeed there are some, like tech entrepreneur V.K. Mathews, who swear that "Kerala is the best place (to do business) in the country"

The other act of state-sponsored defiance against big business is evident a couple of kilometres from the city centre in a state-run high school, where students are contributing their two bits to the government's anti-business stance, by learning free software, instead of Microsoft's Windows operating system. According to a recent diktat from the state's Education Minister M.A. Baby, students across 2,650 government and government-aided high schools will now cut their teeth on free software rather than get Windows. "Kerala will be the free software destination of India," Baby tells this writer, even as he prepares to roll out this ambitious initiative state-wide. Education department officials put down this move to a recent visit by free software maven Richard Stallman, who made a forceful case for the move, and Achuthanandan's long-standing antipathy for Microsoft.

According to Microsoft officials, however, using paid and proprietary software has its own advantages and the company has even rolled out cheaper packages keeping in mind the education segment. Rohit Kumar, Country Head (Public Sector), Microsoft India, says, "Microsoft has a long-term vision towards the cause of it education. Microsoft has successfully created a competitive pricing model and Windows XP Pro is available to them at an estimated retail price of $25-$30 (Rs 1,175-1,410) per desktop."

Kerala's anti-business perception isn't from these two incidents alone. The Rs 2,200-crore Vallarpadam Trans-shipment Container Terminal and the ambitious Dubai Internet City (DIC) appear to be in limbo, with a furious blame game in progress between the current and previous governments. "The Kerala Government is not anti-business; DIC will happen, and we will sign a final mou in October," claims the state's Industries Minister Elamaram Kareem. He's quick to add that many proposals have been green-signalled, including a 1,000-acre food processing zone in Waynad, a 260-acre industrial centre in Kannur and the purchase of 162 acres of land to upgrade the Kozhikode Airport. "Investors are welcome to Kerala and we want to change the common perception of the state. We will undertake a Rs 10,000-crore infrastructure makeover for Kerala and will set up a separate public sector company for this purpose," says Kareem. Business, meanwhile, is waiting.