Divorced from its city, global Bangalore struggles on

Divorced from its city, global Bangalore struggles on

Bangalore : As Karnataka’s latest political scandal unfolded—the discovery of a 30kg stash of gold and 1.5 crore in cash at the home of arrested mining baron and former minister G. Janardhan Reddy—a senior executive of Infosys Ltd explained the municipal skills of India’s fourth largest information technology (IT) company.

Infosys’ annual report details that the water tanks at its campuses overall, for instance, can store 33 million litres of water, enough for Shimla’s needs. The company’s diesel gensets can produce 134 megawatts of electricity, nearly as much as Mysore’s daily requirement. None of this makes economic sense.

“Captive power is an expensive option," explains the senior executive. “Up to 12 per unit, against 5.50 per unit of grid power."

Only a third of the garbage is collected, half the middle-class population faces bribe demands, according to a World Bank report, and infrastructure is now so decrepit that many of Bangalore’s 1,600 technology companies run their own transport services, generate their own electricity, manage their own sewage systems, run industrial estates and often manage their own water supplies.

Global Bangalore, it appears, is divorcing itself from local Bangalore with increasing speed.

Many CEOs, reluctant to speak on record, said brand Bangalore is now so tarnished that the city is quietly losing jobs and revenue to better-equipped, better-governed competitors worldwide.

“Over the last seven years, there has been an increasing divergence between corporate needs and what the government does," said Mohandas Pai, chairman of Manipal Education and, until recently, Infosys board member. The city could have added 300,000 technology jobs in addition to the current 500,000, if Bangalore had realized its potential, said Pai. Using the metric that every technology job generates four jobs in related services—from construction to taxi services to hospitality—this means the city of eight million people (three million in 1990) has lost about a million jobs. “For any government, jobs should be the biggest priority," said Pai. “Here, the political leadership just does not get it...today, Bangalore is stagnating and the brand is getting hurt."

Bangalore’s decline transcends political affiliations. The Congress, the Janata Dal and the Bharatiya Janata Party have been equally complicit over two decades. “I have served all three (governments), and I can confidently say they regard Bangalore as a golden goose, no more," said a senior bureaucrat, speaking on condition of anonymity. “We do help, but companies must survive on their own."

Today, if Bangalore contributes about 34% to India’s total outsourcing revenue of nearly $70 billion (Rs 3.22 trillion), the government can claim no significant credit.

“Bangalore offers the most congenial risk profile among other Indian metros with minimal threat of terrorism, regionalism and political disturbances," said a 2010 report by Tholons, a global investments advisory service. “However, the city is prone to a high level of bureaucracy and corruption." As with many Indian cities, the problem grows because Bangalore supplies no more than 24 of 224 seats in the legislative assembly. It does not matter that the city supplies 60% of the state’s revenue.

The political decline is particularly acute in light of other progressive measures led by the IT-enabled administration. About 20 million land records are online.

Multinationals like Cisco work with the government on taking medicine to remote areas. The state’s Yeshasvini health insurance project, conceptualized by cardiac surgeon Devi Shetty, is touted as the world’s cheapest at 5 (11 cents) a month, covering 2.5 million poor people.

The government continually builds new flyovers, underpasses and a new Metro is under construction, but none of it is adequate or adequately planned. The Metro construction is chaotic, slow and the first stretch (or reach 1) of the first phase, expected to open this month, runs for no more than 6km of a total 18 for phase I.

For quite some time now, Infosys has been struggling to get its new 300-acre Sarjapur campus going, but approvals are still pending. “There is a huge lag in the project because of governmental delays," said the senior Infosys executive on condition of anonymity. “This is unfortunate. We are talking about 40,000 jobs here. Which company is waiting to create 40,000 jobs today?"

Other companies have plans too. Wipro Ltd is planning to invest 1,000 crore in centres in Sarjapur Road and in Devanahalli, while Tata Elxsi Ltd is considering a 486 crore investment for a hardware design and development centre at Devanahalli, on 20 acres.

Many companies have plans and if and when they will come to fruition, and in what form, is an open question. But the interest indicates the still unrealized power of brand Bangalore.