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Nagpur: Catching up with IT
IT companies are slowly waking up to the potential offered by Nagpurgood infrastructure, abundant and cheap labor, and the SEZs
Monday, October 29, 2007
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Nagpur is the largest city in central India. The countrys geographical center (Zero Mile) passes through the city. Thus, every distance in India is measured with Nagpur as the starting point. In fact, for quite sometime, there have been talks of making Nagpur the second capital of India due to its strategic location. Certainly, the infrastructure is worthy of a capital city.

Infrastructure Strength
According to a recent study conducted by UK-based estate consultants Knight Frank, among a host of other cities, Nagpur is ranked number one in terms of physical infrastructure, at par with Chandigarh and ahead of cities like Visakhapatnam, Jaipur, Kochi, Goa, and others. This is quite a vindication for a city that has largely been untouched by rapid economic developments made elsewhere in the country.

The city is also well connected, both by road and railways, to different parts of the country. In fact, Nagpur is the transit point for all the trains that connect the country. The city is also connected by air to all the major airports, and now also boasts of international flights connecting the city globally. And with the launch of the multi-modal international hub airport at Nagpur (MIHAN) in 2002-03, the city has truly become an important transit location.

Zero Mile: Indias geographical center passes through here

An Industrial Hub
Spread over an area of 250 sq km, Nagpur was one of the first cities in India that embraced industrialization. Way back in 1877, the Tata Group started the countrys first textile mill, the Central India Spinning and Weaving Company, in Nagpur. Since then the city has been a center of commerce in the Vidarbha region. A large number of industries are located in Butibori industial area that lies in the vicinity of Nagpur. Similarly, there are many companies like Mahindra & Mahindra, NECO, Bajaj Auto, Vicco Laboratories, which are present in the Hingna industial estate.

IT companies are also waking up to the potential offered by Nagpur in terms of good infrastructure, an abundant and cheap labor pool, and the SEZs. Already a number of companies have taken up space in Nagpur, like Satyam Computer Services. L&T is setting up an Infocity.

"Much of the IT business in Nagpur is driven by these companies. There are a few that are based in Nagpur and, hence, local players are benefited. Till a few years back, not many hardware vendors had a presence in Nagpur but that has changed dramatically. Today, every companyfrom IBM to HCLhas a representative in the city. Even Microsoft has come here and grown by over 900%," says Vinod Verma, CEO, Key Computers.

One of the major buyers in the region is the IAF, which spends close to Rs 3 crore annually on IT.

The MIHAN Effect
Every one in Nagpur seems to be talking of just one thing, MIHAN. Not surprisingly, after decades of neglect, Nagpur has finally got a project that it deserves and that too the biggest infrastructure project in India.

Taking a chapter right out of China, the government of India is beefing up Nagpur as a major hub. So, around the airport, over 2,000 hectares of land has been earmarked for the MIHAN project. The government agencies are ensuring that this project is of global quality, thus, the construction is high grade and so are all other amenities. Little wonder then that major companies like Satyam Infotech, GE, DLF, Shapoorji Pallonji, L&T Infotech, Patni Computers and Microsoft have taken up large parcels of land in the SEZ within the project. And that is not all: TCS has also announced setting up of a 5,000-seater facility in Nagpur. Even MNCs like IBM and Dell have taken up space in Nagpur.

"MIHAN is going to completely change the face of the city. It has been the biggest thing to have happened and all the players within the city as well as outside are keenly awaiting its completion," says Malathi Swaminath, managing director, Zeta Softech.

It will cost around Rs 3,500 per sq ft. "MIHAN makes a lot of sense for IT companies that want to set up shop in Nagpur in a big way. Not only is it cost-effective, but as the colleges and residential areas are in close proximity, there will not be a shortage of manpower to companies working out of it," says Rakesh Agarwal, CEO, Mayur Computers.

Strengths

  • Great city infrastructure

  • One of the biggest infrastructure projects in the country, MIHAN, is in the city

Weaknesses

  • Lack of political interest

  • Poor power supply

A Scientific Hub
Over the years, largely due to the presence of innumerable engineering government companies, Nagpur has emerged as a scientific and engineering hub. The city is home to a number of national-level scientific and governmental establishments like the National Environmental Engineering and Research Institute, the Central Institute of Cotton Research, the National Research Center for Citrus, the National Bureau of Soil Survey and Land Use Planning, the Jawaharlal Nehru National Aluminium Research and Development Centre, the Indian Bureau of Mines, India's Intellectual Property Training Institute, the National Academy of Direct Taxes, the Chief Controller of Explosives of the Petroleum and Explosives Safety Organization, and the South Central Zone Cultural Centre, in addition to a regional office of the Indian Meteorological Department.

"Nagpurs biggest strength is its educational institutes. With around eighteen engineering colleges in and around the city, there is a steady flow of workforce. The big problem was that till now there was not much opportunity for these people. But that is changing, and as benefits from MIHAN and other projects percolate, Nagpur will see a reverse brain drain," says Chandrahas Chaudhari, technical head, Business Services, ADCC.

"Nagpur has all the makings of an IT hub but, sadly, it has not been the case. According to me, the city is very well suited for high-end R&D and has the best engineering graduates that you can find anywhere in the country. The only problem is that it gets very hot in the summers," says AK Maji, director (Acting), NBSS-LUP.

For far too long Nagpur has been a victim of political machinations. The region (Vidharbha) has wanted to separate itself from Maharashtra, which does not want to let go because of its immense natural wealth (remember Chota-Nagpur mining belt). The city has dragged along almost valiantly, been relegated to secondary status within the state.

But all that seems to be changing now and those huge cranes near the airport are laboring toward a new morrow. Nagpurs time seems to have come to reclaim its rightful position under the sun.

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