Govt report recommends ways to revitalize Bangalore's IT

Karnataka Information Communication Technology Group, a special body set up by the state government, presented its report to the government on Tuesday. 

The report proposes efforts towards improving education, talent development, entrepreneurship development, infrastructure development, strengthening Karnataka's relationship with other countries, development of the ESDM (electronics systems design and manufacturing) sector, readying tier II and tier III cities for business expansion and living, and refurbishing brand Karnataka and Bangalore. 

The report is the outcome of several rounds of interactions and brainstorming sessions between industry leaders, government officials, technologists, educationalists and domain experts. 

Speaking on the occasion, chief minister Jagadish Shettar said, "Our government is keen to follow this business road map. The recommendations will be implemented in phases to bring in holistic growth to the state." 

The report titled 'Karnataka's Roadmap to Undisputed Global Leadership in ICT by 2020' was prepared by a team headed by TV Mohandas Pai, former board member of Infosys. 

The report suggested that the government should clear all pending IT projects in the next 90 days. It said that Bangalore could be positioned as a MICE (meetings, incentives, conventions and events) destination. 

The Karnataka government has asked marketing specialist and consultant Harish Bijoor to prepare a report on Brand Bangalore. Bijoor said that Bangalore would outpace Delhi and Mumbai, and record the highest per capita income by 2030. "Bangalore is a microcosm of modern India. If you look at the demographics, 63% of the city's population is below the age of 25 years compared to the national statistic of 54%," he said. 

The report makes recommendations that seek to address the city's pain points and outline the need for a strong imagery to stay relevant in 2020. "The focus is on creating an inclusive city," Bijoor said. The report will be submitted to the state government in the next three months.

Karnataka to help ICT industry create 2 mn jobs

The Karnataka government would partner with the burgeoning Information & Communication Technology (ICT) sector to generate two million jobs in the state by 2020, Chief Minister Jagadish Shettar said Tuesday.

"The state government will implement the ICT group's recommendations by making budgetary provisions over the next four-five years to enable the ICT industry generate two million jobs by 2020 from 0.8 million (eight lakh) presently," Shettar told reporters here.

With a view to maintaining the state's leadership position in the knowledge sector, the state government had set up the 'Karnataka ICT group' in June 2012 under the chairmanship of T.V. Mohandas Pai, chairman of Manipal Global Education Services Ltd and former director of Indian IT bellwether Infosys Ltd.

"As the premier IT state, our objective is to triple ICT exports to Rs.4 trillion (Rs.4 lakh crore/$74 billion) from Rs.1.35 trillion (Rs.135,000 crore/$25 billion) over the next eight years and help incubate 1,000 start-ups and entrepreneur-driven firms by 2020," Shettar asserted.

In order to achieve the ambitious targets, the group has recommended setting up a Rs.1,000-crore (Rs.10 billion) ICT & Innovation fund for infrastructure development and Rs.100 crore for incubating start-ups and new IT firms.

"To create the huge talent pool required for the ICT sector, the state government should provide free Wi-Fi (wireless fidelity) across Bangalore, distribute a Tablet PC with 3G connection, pre-loaded with teaching material to students in class 7 and above and connect all government and private schools and colleges with high speed bandwidth," Pai said on the occasion.

The group also recommended setting up of learning academy and talent development centers in ICT and Electronics System Design Manufacturing (ESDM) areas across the state to train thousands of youth in developing skills required by the sector.

"We have asked the state government to develop ICT centres at Belgaum, Dharwad, Gulbarga, Hubli, Mangalore, Mysore and Shimoga on the lines of hub and spoke model, with Bangalore as the tech hub," Pai pointed out.

The group also suggested expansion of the metro rail connectivity in and around Bangalore to cover 250km, development of elevated high-speed travel corridors across the city and proper solid waste management and drainage facilities by 2020.

Gurgaon, Noida set to eclipse Bangalore in IT space

North India has emerged a hot spot for IT and IT-enabled services industry with many large companies setting up their businesses here. While Shimla and Chandigarh are among the top cities with investment potential, it is the National Capital Region, including Gurgaon and Noida, that is becoming the preferred destinations for companies offering IT, ITeS, BPO, BTO and KPO services in various domains such as banking, financial services, insurance, pharma, auto, FMCG and manufacturing.

According to a study by Assocham, Bangalore may lose its crown of India’s Tech Eden to Gurgaon and Noida. The study showed that leading IT and ITeS vendors prefer to shift their focus from Bangalore to other cities — especially the satellite cities of Gurgaon and Noida — to generate more revenues.

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.

Conducive environment

As many as 30 per cent of the top-ranked officials of IT companies based out of Bangalore said they prefer to shift their business to Gurgaon. Of the remaining, 25 per cent respondents said 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.

“Gurgaon’s cosmopolitan culture, modern infrastructure, availability of skilled workforce and proximity to Delhi along with industry-friendly government policies are the factors which give it the edge,” Assocham said. Some of the top names in IT, including HCL, NIIT and Genpact, are based in NCR . “The advantages we see in this part of the country include good infrastructure with better connectivity within the area. Another major enabling factor is the relevant pool of resource/talent available due to the spread of reputed educational institutions in this area,” said the NIIT Technologies spokesperson. The company has 4,700 employees in the NCR region across three offices spread over 7.8 lakh square feet. Himachal Pradesh is portraying itself as an alternative location to the NCR. Nasscom conducted an extensive survey amongst 11 cities/ towns to find out the relative advantages/disadvantages of these cities/towns to attract IT investments.

The survey discovered that Himachal Pradesh is uniquely positioned to exploit its inherent as well as inculcated plus points for furthering IT in the State.

The major advantages include excellent power situation, salubrious climate eminently suited to IT industries, capability to increase the pool of skilled manpower, engineering colleges and other educational institutions, low cost of setting up an IT unit as well as low recurring cost (including cost of living).

Software tech park

Chandigarh and Jaipur are the other emerging cities for IT investors. The Software Technology Park in Mohali is the top exporter of software among the Tier 2 cities in North India. It is also one of the top three software exporters amongst the Tier 2 cities in India. Chandigarh got a boost for IT investments when the Government set up the Rajiv Gandhi Chandigarh Technology Park. “Chandigarh, being one of the first planned cities in India, always had an extremely good civic infrastructure and power situation. The connectivity to Delhi is excellent due to the Shatabdi trains and has, therefore, attracted many companies to consider the Tricity as an alternative location in North India,” says a PwC report

Karnataka's aerospace policy awaits Cabinet nod

The Karnataka government has finalised its much-awaited aerospace policy and the cabinet clearance is awaited. Through this policy the state government is looking at attracting $10 billion (Rs 55,000 crore) investment in the next 10 years and make Bangalore a major aerospace hub in South Asia.

“The policy draft was circulated to the stakeholders earlier this year and we have now fine tuned it. It is currently before the state cabinet for final approval,” M Maheshwar Rao, commissioner, department of commerce and industries said.

The new policy will be in place for a period of 10 years starting 2012. During the first phase of (2012-17), the state government is looking at attracting $4 billion investment into the sector. During the second phase (2017-22), it plans to attract another $6 billion worth of investment in the aerospace sector, the policy draft said. It also envisages creation of jobs for about 100,000 persons during this period.

The policy is likely to be announced in January 2013, a few days ahead of the forth coming Aero India 2013, the premier defence aviation industry exhibition in Bangalore.

The policy is aimed at increasing the contribution of Aerospace sector towards enhancing the share of industry in the State’s GDP from 28 per cent to 30 per cent in the first phase and to 32 per cent in the second phase.

Other main objectives of the policy are to make Karnataka a preferred global destination for manufacturing of aircraft, aircraft systems and sub-systems, assemblies and components. It is aimed at making Bangalore a magnet for global Tier-I suppliers and promote the state as one of the leading MRO hubs in Asia. Strengthening of R&D infrastructure for achieving innovative and cutting edge technologies.

Karnataka is already home to India’s aerospace industry. As early as 1940, India’s premier aerospace establishment, Hindustan Aeronautics Limited (HAL) started its activities in Bangalore. Other public sector undertakings like Bharat Electronics Limited, NAL, DRDO, ADA, ADE, ISRO among others are present in the city.

“Karnataka intends to take advantage of the promising scenario and strive to project the state as the aerospace hub for Asia in the next five years and as one of the top global aerospace and MRO destinations by 2022,” the draft Aerospace Policy document said.

The policy has been formulated through extensive consultation process with industry associations, trade bodies, related government departments, organizations and other stakeholders. The Aerospace Core Group committee constituted by the government of Karnataka also discussed the policy framework. The Confederation of Indian Industry (CII) and PwC offered suggestions.

Aerospace infrastructure shall include both new establishment, modernization of existing facilities, maintenance, repair and overhaul (MRO), testing facilities, laboratories, storage hubs and silos, warehouses, common technical and service centers, aerospace SEZs among others.

As part of its efforts to promote aerospace industry in the state, the Karnataka government has already earmarked 1,000 acres for Bangalore Aerospace SEZ and Park near the Bangalore international airport at Devanahalli. Already, land has been allotted to 27 companies including HAL, BEML, and Dynamatic Technologies among others.

Aerospace majors such as Boeing, Airbus, Bombardier and Embraer have evinced interest to take up space for setting up their India facilities in Bangalore. The park has potential to emerge as an aerospace industry cluster with an ecosystem to generate direct jobs to 242,000 people and house domestic and overseas firms in an integrated space with required infrastructure facilities.

Karnataka also proposes to establish a new Aerospace University in the state in association with a suitable knowledge partner. It is also proposed to have a flying training school to be located within the campus. The university and the flying school will be set up as a joint venture between the state and interested investors. It is also proposed to infuse capital into innovative ventures by creating an Aerospace Venture Capital Fund with a corpus of Rs 200 crore with participation of government (to the extent of Rs 50 crore), financial institutions and other investors.

It’s curtains for Pallavi theatre

Multiplex effect

Another Bangalore landmark is set to vanish. The 36-year-old Pallavi theatre, located across the street from the Kanteerava Indoor Stadium, will be brought down soon.

Since 1976, the theatre has long regaled Telugu moviegoers and will have its last screening on December 26. The building will make way for a 10-storey superspeciality hospital.

Hari Kumar, a staff member at the theatre, cited financial problems and a change in the taste of cinema audience as the reason for the closure. “The cinema-viewing culture in urban areas has undergone a drastic change. People are overawed by luxury theatres housed in shopping malls, which offer more than just movies. It has become difficult to fill all the 1,211 seats in our theatre. While we get viewers in the first week of any release, the number dwindles in the following weeks. Because of this, the management has decided to close down the theatre,” he said.

Reinvention

With the rise of multiplexes, standalone theatre owners have had to reinvent themselves or face extinction. Although several iconic theatres - Lido, Rex, Majestic and Kalpana, to name a few - still remain, by and large many of the old theatres have faded into history. 

Many standalone theatres have transformed into multiplexes to keep pace with the competition. Other theatres like Santosh, Nartaki and Sapna on KG Road whose land lease expires in 2013 are set to become multiplexes. 

“This has been the phenomenon in the last decade. The new concept of shopping and entertainment under one roof and the weekend culture has taken us by storm. Even people from Ramanagar and other semi-urban areas spend time at shopping malls and watch movies. We have to see this in the larger context of the development model and the ethos that it evokes in our society,” says B Suresh, director of Kannada films.

“One of the best things that the multiplex has done to films is that it has killed the hero and has given space for experimentation.”

K V Chandrashekar, owner of Veeresh Cinemas, said multiplexes have democratised film exhibition in the City. 

“Earlier theatres were concentrated in the Majestic area. They were only a few which we used to call suburban theatres, but now there are some 198 screens in the City, with films now being screened in Vijaynagar, Jayanagar, Bana*shankari, Jalahalli, Marathalli, Koramangala – areas which never had theatres earlier. Standalone cinemas that stood regally in the central business district are facing a shortage of audiences as cinephiles now have access to a screen closer home,” he said.

Subsidised tickets

Many cinegoers, however, complain about the high ticket prices at multiplexes and feel that such theatres will never be accessible to low-income groups. The average ticket price at a standalone cinema house is Rs 50, while it is at least Rs 150 at a multiplex. One way to redress these odds is to look at Tamil Nadu as an example, explained B Suresh.

At subsidised rates

“The Tamil Nadu government has decreed that 25 per cent of the seats at these multiplexes must be available at subsidised rates. Everyone would go to multiplexes if the same rule is followed in Karnataka,” Suresh said.

Recently, the Karnataka Film Chamber of Commerce tried to control the ticket fares at multiplexes, stating that it should be no more than Rs 20. Resistance from the multiplex lobby, however, resulted in a stay order on the proposal from the Competition Commission of India.

Bangalore ranked third in job generation in 2012

The year 2012 saw a 21 per cent decline in job generation in various sectors across India.

Bangalore ranked third among major cities as over 75,000 jobs were generated between January 1 and December 15, 2012, according to an analysis carried out by Associated Chambers of Commerce and Industry of India (Assocham).

The National Capital Region (NCR) topped the country as over 1.1 lakh jobs were generated during the period followed by Mumbai with over 77,000 jobs. Chennai secured the fourth place by generating over 44,000 jobs.

The least number of jobs were generated in Kolkata (over 25,000) among the top five metros, said D.S. Rawat, secretary-general, Assocham.

Over 5.3 lakh jobs were generated during the period across India. The first half of the year saw over 2.8 lakh jobs generated, said a survey, ‘Job trends across India in 2012’.

Assocham sourced its inputs primarily from data tracked on a daily basis for vacancies posted by about 4,000 companies in job portals such as timesjobs.com, naukari.com, monster.com and shine.com and job-related advertisements published in national and regional newspapers for 56 cities and 32 sectors. Information technology (IT) sector topped the list by generating over 2.1 lakh jobs in the country. Academics and education ranked second with over 34,500 jobs followed by insurance (over 27,100), banking (24,500), automobile (22,890), financial services (22,500), manufacturing (20,400), engineering (18,650), hospitality (16,100) and IT hardware (15,600 jobs).

Academics and education sectors registered a 16 per cent growth in job generation in the first six months of 2012.

The aviation sector registered a job generation growth of over 78 per cent in the second half of the year (till December 15) followed by sports (41 per cent) and retail (6 per cent).

In Delhi, the telecom sector generated maximum employment opportunities with over 53,000 jobs followed by IT (over 11,000 jobs), hospitality, manufacturing, architecture, infrastructure, textile, banking, real estate and gems and jewellery.

Assocham analysis shows that job market has slightly recovered in the last six months as employment generation growth declined by about 15 per cent between July and December 15 while the decline was by over 25 per cent during the first six months of the year.

Wipro plans to build its biggest campus near Bangalore

At a time when shaky global economic cues have pushed most companies to postpone real estate investments, India's third-largest software exporter Wipro BSE -1.65 % is finalizing plans to build its largest campus that can house at least 30,000 employees in Bangalore.

The new campus, whose first phase is expected to have a built up space of 2.5 million square feet, will come up on a 50-acre plot that is 4 km away from its existing 1.9 million sq ft campus in Sarjapur, on the outskirts of Bangalore.

This will be in addition to Wipro's existing campuses across the country and is not aimed at consolidating operations. Currently, the software major's headcount stands at about 138,000 employees. "We are currently in the process of finalising the master plan for the new campus," said Hariprasad Hegde, vice-president and global head of operations at Wipro. He did not provide details on the developer of the project or how much it would cost.

The Sarjapur facility -the largest for the company so far - accommodates nearly 31,000 employees.

The proposal to develop an additional campus was pending for sometime due to issues with land approvals. However, these have now been sorted out and the company has received the go-ahead for the project. Wipro is currently working with architects on the master plan.

Software biggies have been investing in new development centers to cater to future growth even though the current industry situation is not encouraging. In October, India's largest software exporter Tata Consultancy Services BSE  -1.25 %  also announced plans to build a 1.5 million sq ft facility in Indore.

For Wipro, which added 13,000 employees last fiscal, the hiring pace has slowed down this year as the employee churn has stabilized. In November, software body Nasscom said the industry's growth target for the year to March 2013 would be at the lower end of the 11-14% range it forecast earlier.

Last year, the sector grew a little over 16% to touch $70 billion (about Rs 3.85 lakh crore) in exports. Faced with tough macro-economic situations in the US and Europe, large corporations there have been delaying technology spending.

Revenue from the US and Europe together make up over 80% of the revenue for Indian IT services companies. On Tuesday, shares of Wipro closed at Rs 388.10 on the Bombay Stock Exchange, down 1.6% from Monday's close.