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India's IT capital: Bengaluru may lose crown!

Last updated on: May 31, 2011 14:26 IST

India's IT capital: Bengaluru may lose crown!

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Bengaluru may not remain India's 'Silicon Valley' for too long owing to its crumbling infrastructure and associated woes, says an Assocham study.

According to the survey, nearly 55% of the IT companies based in Bengaluru are relocating their India headquarters to other cities of the country.

The capital of Karnataka and for long India's Tech Eden, Bengaluru is in danger of losing its crown to Gurgaon and Noida in the national capital region that are steadily becoming preferred destinations for companies offering IT, ITes, BPO, BTO and KPO services in various domains like banking, financial services, insurance, pharma, auto, FMCG and manufacturing.

The findings of a just-concluded survey undertaken by the Associated Chambers of Commerce and Industry of India show that Bengaluru is losing its sheen due to crumbling infrastructure, compelling many companies to head towards more convenient and industrial-friendly centres.

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Image: Bengaluru is fast losing its sheen because of inadequate infrastructure.
Photographs: Rediff Archive
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Leading IT and ITeS vendors prefer to shift their focus from Bengaluru to other cities -- especially the satellite cities of Gurgaon and Noida -- to generate more revenues, the study said.

"The growth explosion in Bengaluru has pushed the city towards a serious civic crisis," said Assocham secretary general D.S. Rawat.

"Roads choked with vehicles, frequent power outages, erratic water supply and poor sanitation are tough problems on account of which Bengaluru is losing its lustre to rapidly-developing Gurgaon and Noida," he added.

Assocham interacted with around 800 directors, CEOs, CFOs, chairmen and managing directors of Indian and multinational companies in various verticals with a choice of five cities to relocate their businesses to garner more revenues.

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Image: Gurgaon and Noida are fast emerging as the new tech centres.
Photographs: Reuters
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India's IT capital: Bengaluru may lose crown!

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As many as 30 per cent top-ranked officials of IT companies based out of Bengaluru said they prefer to shift their business to Gurgaon.

Of the remaining, 25 per cent respondents said that they would prefer to shift their base to Noida or Greater Noida which are rapidly developing software and BPO hubs.

About 20 per cent said that they would prefer to shift their base to Chandigarh which offers a conducive business environment.

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Image: Chandigarh too is being increasingly preferred by IT firms to set up a base in.
Photographs: Rediff Archive
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Nearly 15 per cent of respondents said that they prefer Pune to operate from where a large number of IT companies are running their operations.

The remaining 10 per cent of respondents said they will prefer to relocate their business to Hyderabad.

"Gurgaon's cosmopolitan culture, modern infrastructure, availability of skilled workforce, proximity to Delhi, and industry-friendly government policies are the major factors that give it an edge over Bengaluru," said Rawat.

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Image: Nearly 15 per cent of respondents said that they prefer Pune.
Photographs: Reuters
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India's IT capital: Bengaluru may lose crown!

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In Bengaluru, narrow and choked roads and poor civic amenities are some reasons why software companies have stopped expanding their business operations. Deteriorating quality of life, pollution, and rising costs of goods and services are adding to Bengaluru's woes.

Interesting, however, Bengaluru-based IT firms that are unhappy with the city's infrastructure are not too keen to relocate to Gujarat which otherwise has great infrastructure.

One of the main reasons for Gujarat not being on the radar of these firms is the lack of manpower for IT and related firms.


Image: The Charminar in Hyderabad.
Photographs: Reuters
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