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'The odds are against West Bengal'

June 17, 2008 14:55 IST

Indian American and Indian entrepreneurs believe the West Bengal government, which is projecting the state as an ideal investment destination for information technology and hi-tech industries, has to go a long way before it can become India's number one hub for such industries.

Dr Debesh Das, IT minister of the Communist-ruled state, (see Interview) said in recent years West Bengal has  attracted major companies like Tata Consultancy Services, Cognizant Technology Solutions, ITC Infotech, Computer Associates, Siemens, IBM, and Wipro, among others. He cited a study saying that small and medium enterprises in Kolkata are doing better jobs compared to those in Hyderabad and Pune.

But some of these entrepreneurs, in phone and e-mail interviews with this correspondent, complained about perennial strikes, power cuts, alleged lack of transparency, and inadequate infrastructure that have become the state's hallmark.

One entrepreneur, who left the US to set up shop in Kolkata, said he ordered eight laptops from Dell in Chennai and was told that West Bengal is one of the four states for which Dell cannot collect the taxes directly. Therefore, he needed to go to a state government office to pay the taxes, and send Dell proof of payment. He also needed to send someone to the airport with the proof to pick up the shipment and the process delayed his order by 10 days.

Shaibal Roy, an Indian Institute of Technlogy-Kharagpur alumnus who returned to India recently  --  after 23 years in the US  --  to launch his third start-up, echoed the sentiment.

"People in West Bengal do not seem to mind the diesel fumes, the open sewers, and the frequent outbreaks of malaria, dengue, and avian flu. But once they visit a friend in Gurgaon or Noida, the odds are against West Bengal. It needs to go beyond retaining the natives; it needs to become a destination for young people from other parts of India," Roy told India Abroad. "Think about it: If you are a teenager in a cleaner, better managed city in the western part of India today, would you even consider moving to Kolkata?" he said.

Amitava Maulik, computer engineer and IIT-Kharagpur alumnus who went back to Kolkata after spending 12 years in the US to give back to his state, said Kolkata played a big role in his entrepreneurial success as he was able to take two companies from zero to over 100 employees and was able to help others like him to set up shop in Kolkata.

"We have been able to innovate and sell against established market leaders in countries around the world, including in Europe and America. The quality of engineers, their loyalty, their problem-solving skills, dedication, etc, all of them were the key to our being able to successfully compete against companies from Bangalore, Israel, the United Kingdom and the United States," Maulik, chief scientist of New York-headquartered Connectiva Systems Inc, said. But he felt while the state government has the right intentions, it should seek feedback from entrepreneurs before deciding on a policy to help them. "What they need is a hassle-free setting up of companies, legal help, finding reasonably priced workspace, modular workspace that allows growth, good transportation, better infrastructure, more technical conferences, etc," he said. "Entrepreneurs know how to find money, how to build products, and how to make their ideas sell. What they don't know is how to do is how to work the Indian system and get the company running, find hassle free infrastructure at reasonable cost," he added.

A number of entrepreneurs believed that to make West Bengal the IT destination in India there is a need to encourage technical and entrepreneurial talent to return to Kolkata.

"That can happen only if they feel that they can set up shop in a hassle-free environment," Maulik said. Roy felt that the government should not give venture capitalist funding because there is no shortage of good VCs. He recounted that an IIT-Kharagpur-based start-up was offered some investment by the state government, but for that paltry sum, the government wanted 51 per cent ownership. "Clearly, the VC arm of the West Bengal government does not know what it is doing. I think the government should stay out of the VC business," he said.

Arnab Debnath, CEO of the Silicon Valley-based Anshinsoft, who started operations from Kolkata in 2001 to expand development capacity cost effectively, said it may be a good symbolic start to embrace the culture of the new generation. "But I am not sure how much it will help the state in real terms," he said.

On cost effectiveness, which the minister touted as one of the advantages of Kolkata, Debnath felt that the low cost advantage was available at one time, but said it is thinning out and infrastructure cost is growing with the rise in demand. He also felt the pool of credible and good people gets exhausted pretty quickly given that all the big industrial houses are trying to move in to Kolkata.

'I want West Bengal to be India's hi-tech hub'

Suman Guha Mozumder in New York