It sounds like an investor’s dream state. Surplus power, excess bandwidth, amazing subsidies, cheap real estate and low cost of living, single window clearance, two sea ports, rich talent, low attrition...

Okay, that’s from the brochures. But there is some truth in there. Even if behind the ‘resource excess’ is the reality of underutilization (with industry moving out of West Bengal). Tick off the things you need for an IT destination, and Kolkata scores high. Yet, it did so even in 1992.

This state was interested enough in IT over a decade ago to set up SALTLEC, the Salt Lake Electronics Complex, with a ‘single window’ state agency, Webel, in charge. SALTLEC now has over 50 IT units, with names like TCS, Cognizant, PwC, IBM, CMC, CA and United Airlines behind them. Even ten years ago, the venerable Jyoti Basu, who serve for 23 years as chief minister until 2000, would personally inaugurate IT units at Salt Lake and express his government’s interest in IT. In 1992, a Dataquest cover story said Calcutta was IT’s rising sun.

We were wrong. Kolkata is so far behind as to be irrelevant. Why does it bring in just 3% of India’s software exports? Why is the entire eastern region IT market so clearly fourth among four regions? Why do foreign customers threaten to walk off if a software house suggests Kolkata as a base?

Looking at India’s newer IT locations suggests some answers. What did Gurgaon have in the 1990s? Not infrastructure—it barely scored over a desert. It did have the brand extension of Delhi: to a foreign services customer, it’s a Delhi suburb. That also gave it trained engineers and lakhs of English-speaking graduates. And there was speed and a laissez-faire approach from Haryana.

Target 2010

West Bengal plans to be #3 among the states by 2010, moving up from 3% of India’s exports to 15%. That would be a $15 billion IT industry employing 400,000—over half of that in ITeS. The imperatives:

Develop talent Streamline investor marketing and support Build physical infrastructure Encourage local entrepreneurship Drive e-governance Encourage industry verticals such as manufacturing and FSI.

Source: McKinsey/WB IT Dept

And those reflect Kolkata’s top three problems for IT investors, compounded with the decline of industry over the past decade, and thus a stunted IT market.

Image: It has no brand to draw on from history or proximity. "I have to fight its image," says an ITeS entrepreneur. "First I sell India, then Kolkata, then my company. It’s one more barrier." Kolkata’s scorn for Hyderabad-style marketing hasn’t helped.

Manpower: Rich talent…an IIT and IIM next door? The brochures don’t tell the whole story. A handful of engineering colleges turn out just over 2,000 engineers, less than a hundredth of the southern states’ combined output. Kolkata’s best and brightest do not stay on in the city. Nor do engineers from elsewhere want to move to Kolkata.

Speed and the state: West Bengal is slow. The state talks of quick approvals and telecom connections. But investors from other states list examples of long cycles for clearances, connections, delays from multiple agencies involved in permits—despite the ‘single window’ of Webel. Thus, with less than stellar growth among Kolkata-based software units, there are too few good reference cases to cite.

Kolkata is changing, however. After reluctantly accepting that there was a problem, it appointed McKinsey & Co to study it and list solutions. A more open chief minister, now two years in office, also helped. And the first steps have been taken—stepping up the HR numbers, an attractive ITeS policy, subsidies, active marketing, and more. There are also steps toward IT in governance and education, though funds are scarce. A decade late, a little slow, but the IT sun is rising in the east.

Prasanto K Roy