West Bengal

Not a laggard anymore

The vision of the state government of West Bengal’s is to make the state worthy of being among the top three states of India in the IT sector by 2010, contributing 15-20 percent of the country’s IT revenues. And to make this dream a reality the state government has pledged whole-hearted support to IT companies willing to invest in West Bengal. Joy Roy Choudhury reports

The passage of time has seen things change for the better in West Bengal. Unlike the earlier days of bureaucratic red tape and trade unionism, West Bengal, especially Kolkata, is moving towards being one of the hottest destinations for both software and IT-enabled services (ITES) companies. Power cuts are a thing of the past and the state now boasts of excess commercial power.

The urban infrastructure in West Bengal has improved considerably. Be it roads, bridges, housing facilities or transport. The planned ‘New Town’ at Rajarhat on the outskirts of the Kolkata, the housing projects being developed by Bengal Ambuja, Bengal Peerless and others along the Eastern Metropolitan Bypass would further dilute the housing problems faced by the urban
populace.

But despite the changes, the perception about the ‘laid back attitude’ of the state still remains a major hurdle in attracting fresh investments. While it is partly due to its history, lack of information about the progressive work being undertaken in the state also adds to this negative image. Recently, the state government initiated several measures which should help it in shedding this stigma.

According to the Centre for Monitoring Indian Economy (CMIE), West Bengal has the second highest amount of implemented investments in the country. The study ranked the state second in terms of investment projects completed/commissioned in fiscal 2001. In the three-year period (1998-99 to 2000-01) the state ranked fifth in terms of value of projects, which were commissioned. It is among the leaders in wealth creation. The World Bank has ranked West Bengal second in terms of GDP growth among all Indian states.

Among others, the state also gives top priority to information technology (IT), electronics and knowledge-based industries. These sectors have been performing well and entrepreneurs are reposing faith by investing in IT projects in the state.

Though a late-starter, the state has achieved a lot in the field of IT and electronics in the last couple of years. The proactive policies of the state government—a dedicated department for IT, state-of-the-art facilities at the Salt Lake Electronics Complex, world-class connectivity, uninterrupted power supply, physical and social infrastructure and a large pool of trained manpower—have hastened the growth of the IT sector in the state. Kolkata is also well connected to international destinations in Asia, Europe and the US.

A senior official of WEBEL, the nodal IT body of the state government said, “We have the infrastructure comparable to places like Bangalore and Hyderabad. Kolkata provides international telecom connectivity, physical and social infrastructure, uninterrupted power supply and above all low-cost of operations, all the pre-requisites to excel as an IT destination. But we believe an adverse perception about the state is a major problem and sometimes this image poses an impediment to IT investments.”

The state government has appointed McKinsey & Co to help it in its image makeover.

The official further commented that the state chief minister Buddhadeb Bhattacharjee, along with the state’s IT minister Manabendra Mukherjee are personally monitoring progress in this respect. The state’s IT policy, which was announced a few years back, is to be soon upgraded. The new policy is said to be an aggressive but attractive IT policy aimed at attracting fresh IT investment into the state.

The dream

The IT sector in the state has registered a CAGR (compounded annual growth rate) of 115 percent from 1996 to 2001. The government has spelt out a vision to be among the top three states in the Indian IT sector by 2010, contributing 15-20 percent of the country’s Indian IT revenues.

Availability of built-up space and land

Kolkata today boasts of two Software Technology Parks (STP), with two more coming up at Kharagpur and Durgapur. The 2,50,000 square feet standard design factory with modular Software Technology Park I and the 100 percent export-oriented 60,000 square feet, state-of-the-art Software Technology Park II, house some key IT players from Europe and the Silicon Valley.

Privately-owned IT facilities, like Infinity and Bengal Intelligent Park, have attracted big IT companies too. A private promoter at Behala, on the southern fringes of Kolkata, is setting up another ‘IT Theme Park.’ This park, to be built on 16 acres and 1.2 million square feet of built-up area, will comprise six blocks of 200,000 square feet each. The ‘intelligent space’ will have global standard infrastructure facilities to house global IT and software giants.

In addition, the government makes plots available for new IT projects at a subsidised rate of about Rs 40 lakh per acre, which is 15-20 percent of the prevailing market price. The government also plans to create a 40-acre IT/ITES park at Nonadanga, near Salt Lake.

Connectivity

Kolkata offers about 580 Mbps of international satellite connectivity through Tata-owned VSNL and the STPI. VSNL operates two international gateway satellite earth stations supported by two gateway switches. The STPI has set up its 21st earth station in the city. This station offers bandwidth of 155 Mbps. About 70 percent of this bandwidth is available to new players.

Cable connectivity is provided through BSNL, leased lines of 92 Mbps to Mumbai and onward connectivity through submarine cables landing at Mumbai. Besides BSNL, private players like Reliance Infocomm and Bharti Telesonic are connecting Kolkata through their own NLD backbone to Chennai and Mumbai.

Reliance’s connectivity is likely to be operational soon; Bharti has initiated work on its cable connectivity projects. Additional cable connectivity will also be provided by Railtel (an Indian Railways project), which will provide bandwidth to telecom carriers. In addition, highly reliable local loop options are available from BSNL.

Private bandwidth providers also provide broadband Internet bandwidth to knowledge-based industries that have facilities in the state. BSNL has provided connectivity to 326 out of 341 blocks with 2 Mbps bandwidth, either through optic fibre or a microwave link.

The communication backbone

The government on its part has launched its ambitious West Bengal State Wide Area Network (WBSWAN), initially connecting all the 18 district headquarters and the Sonarpur block which houses the state secretariat through a 2 Mbps fibre optic network, which supports three modes of communication—voice communications using VoIP, data and image communication.

It would also offer Internet facilities to users. Nine other important townships are in the process of being connected, while 341 blocks and 3,660 panchayats will be connected to this network shortly.

The VSAT infrastructure of National Informatics Centre also provides additional bandwidth.

24x7 power @ low cost

The high investments in power generation over the last ten years have made West Bengal one of the few power-surplus states in India. In fact, in their recent surveys, both Nasscom and Gartner have ranked Kolkata as the best state in the country in terms of power supply. The high percentage of thermal power ensures that supply is not adversely affected during the dry season. In addition, the state government ensures the existing low-cost power plants in West Bengal feed all new IT units on a priority basis.

The right connections

Kolkata is well connected to prime locations overseas and in India. These include the prime Asian hubs of Bangkok and Singapore, as well as key Western locations like London, Amsterdam, San Francisco and New York. The city is also well connected to important locations within the country.

Human resources

Apart from world-class infrastructure, connectivity and social infrastructure, the state has the largest pool of human resources. The city houses some of the most reputed schools and colleges in the country. Both Calcutta and Jadavpur Universities have been accorded a 5-star status by NAAC. Several private engineering colleges have been set up in the city, churning out engineers and technocrats.

The government has set up the Indian Institute of Information Technology (IIIT), which is soon to be upgraded into a ‘Centre of Excellence.’

In addition, premium educational institutes like the Indian Institute of Technology-Kharagpur (IIT-KGP), Indian Institute of Management (IIM-C) and the Indian Statistical Institute (ISI) are located in the state.

E-governance

The state government has already computerised the state treasuries and is in the process of digitising land records in the state. Tata Consultancy Services (TCS) is conducting a systems study in 14 state departments.

The other e-governance initiatives being undertaken include usage of the ASP model and government portals in collaboration with TCS, to provide a public interface to government information. The state has recently launched a citizen-centric portal www.wbgov.com, which disseminates information about the state. Oracle India is to assist the state government in its e-governance initiatives.

The state government has taken up an aggressive IT literacy programme in schools and colleges in collaboration with IBM, NIIT, Wipro and other companies.

Webel’s single-window clearance guarantee

At the operational level, the government has ensured ease of operations in Kolkata through Webel (West Bengal Electronics Industry Development Corporation), which acts as a single-window support centre for all IT investors in the state.

Webel helps companies obtain building space on rent/lease in buildings and in the purchase of land. It also interacts with government bodies to help procure last-mile connectivity, to get power connections and interacts with the local municipality to reduce the company’s exposure to bureaucratic problems. Further, the STPI has authorised it to grant registrations on its behalf.

Incubation centre and venture capital fund

Webel has set up an IT ‘Incubation Centre’ to properly utilise the huge pool of human resources the state possesses. This centre provides a platform for aspiring and talented software and telecom professionals in Kolkata to float their own IT-start ups. The IT incubation centre helps turn viable ideas from talented professionals into bankable business proposals.

Webel has set up the Incubation Centre with technical support from the Indian Institute of Management-Kolkata. The centre has 25 workstations where groups can fine-tune their business plans for a maximum period of six months. Each plan has a guide and works closely with consultants from IIMK, in addition to availing of the institute’s infrastructure once the plan is
ready for review by venture capitalists.

Webel and West Bengal Industrial Development Corporation (WBIDC) have contributed separately towards a Venture Capital Fund (VCF) corpus. The VCF will be open-ended with an envisaged 10-year life span. An asset management company has been floated under the name of WB Assets Management Co.

Nasscom also plans to set up a regional office in Kolkata, which will also be a nodal office for co-ordinating its initiatives to attract IT-related investments into the North-Eastern states.

The road ahead

Kolkata’s success in the IT landscape of the country can be gauged from the fact that city has attracted most of the big IT companies. Almost all domestic and international IT players have started set up shop in the city.

The top brass of the IT and telecom industry are all praise for the IT initiatives undertaken by the state government. Most of them are optimistic about the future of IT and ITES industries in the state.

McKinsey & Co, the international agency assisting the state IT department in attracting investments into West Bengal, has predicted that the state has enormous potential to become a global destination for the IT/ITES industry. Buoyed by this optimism the state government is going all out to hunt for private investments in this sector.

Industry experts believe that in light of the initiatives taken by the state government and private players, the IT, electronics and communication sectors in West Bengal are poised for quantum growth.

And the day is not far off when Kolkata too will be rubbing shoulders with its IT-savvy Southern and Western counterparts.