The City Awakens

Kolkata, the city of rasgullas, rabindra sangeet and mishti doi, is the hub
of IT business in the eastern region. This metro has seen a spurt in IT
infrastructure deployment and investment in the past two years.

With a population of 1.3 crore people, Kolkata is estimated to be the second
largest city in the country. However, a Hewitt report in 2003 also pegged the
unemployment rate of 15% of the total unemployed people in India. But with
technology companies like IBM, TCS, Cognizant and Lexmark entering the city,
things are bound to change for the better.

Partners in the city estimate that the IT business is registering a growth of
15% y-on-y, in the past two years. This can be accelerated if the government
propels IT within the state. Partners want the government to give good tax sops
and land at low rates to companies who would like to set up factories in the
city.

While there are official figures on the size of the market, partners estimate
it to be at Rs 1000 crore. There are approximately 50 leading partners in the
city and another 200 all over West Bengal.

One advantage that Kolkata enjoys over other cities is that its port is
closer to Taiwanese markets. This is precisely why HiTA Technology decided to
base its headquarters in Kolkata, so that the transit time is just 21 days by
ship, as compared to 40 days by the Mumbai port.

Another
interesting aspect of this city is that while a chain of MNC retail outlets and
malls have sprung all over the place, the disposable income has not seen an
equivalent surge. Locals still hesitate on making impulsive purchases on
consumer electronics. But they are more than willing to invest in PCs for their
homes and offices. "SOHO and SMB constitute almost 50% of the total IT
market here," says Rajashri Ghosh of Epitom Networks.

The only problem that Kolkata faces, according to partners, is that it is not
backed by other eastern states in accelerating IT business. "In the west,
for instance, Maharashtra's business is backed by good sales from Nagpur,
Ahmedabad and Surat. But in the east, it is just Kolkata that shoulders the IT
business, without any support from other states," says Arun Ghosh of HiTA
Technology.

Also, business is reliant more or less on government institutions rather than
corporate houses. And though the government is pro-IT, more impetus is required
to boost the growth of peripheral industries like steel and cement in West
Bengal. "Once these companies set up factories in the state, they will
automatically invest in IT, which will boost overall business," notes Arun
Jalan of Jalan Infotech.

The business community is nonetheless giving a thumbs up to the current state
government for heralding a business conducive atmosphere. A visit to the IT
ministry comes as a pleasant surprise as there is no red-tapism and visitors can
easily meet the IT minister Manabendra Mukherjee and IT secretary GD Gautama.

VINITA BHATIA