Tuesday, May 6, 2008

Calcutta among top seven in IT, says study

Calcutta is among the seven leaders in the country’s IT-BPO growth story, clocking an annual growth rate of 15 per cent, says a study commissioned by Nasscom.

Calcutta, Bangalore, Hyd-erabad, Mumbai, Pune, Chennai and the National Capital Region are together likely to generate around $52 billion (Rs 211,208 crore) in revenues in 2008, says the study by the National Association of Software and Service Companies (Nasscom) and management consulting firm AT Kearney.

The overall IT-BPO revenue — domestic and exports combined — is expected to touch $64 billion (Rs 263,501 crore) in the year ended March 2008, a growth of over 33 per cent.

“Calcutta has been categorised as a leader city because of the large number of English-speaking graduates it generates each year,” said Nasscom president Som Mittal, adding that the IT-BPO sector in the city would continue to grow at 15 per cent annually.

The study also said that tier II and tier III cities had the potential to become operatio-nal hubs for software companies. About 15 tier II cities could challenge the leaders.

The study says the leader cities would have to solve infrastructure problems and keep attracting and retaining the best talent for IT companies to continue to flock to them.

Challengers like Chandigarh, Jaipur, Lucknow, Indore, Ahmedabad, Vadodara, Nagpur and Visakhapatnam are coming up fast, says the study.

These cities offer lower overhead costs and a good quality of life and can attract talent from nearby regions.

“The Indian IT-BPO sector has been the front runner of economic development in select cities. The time is now right to spread this development to a new set of locations, provided the requirements of the industry can be met,” said Nasscom chairman Ganesh Natarajan.

The study, which assessed 50 locations across India for setting up software operations, is expected to help state governments and planning agencies to attract investments.

Over 90 per cent of the 20 lakh people directly employed in the IT-BPO sector are now located in the seven leading cities. “Over the next decade, a conservative 15 per cent growth in the rate of employment will lead to direct employment for about 80 lakh people,” says the study.

The total direct employment in the top seven locations is likely to grow to 50-60 lakh.

However, Mittal said: “The development of only a few select cities has put severe pressure on the infrastructure, costs and also increased migration of resources.... The seven centres will now need proactive planning and meticulous execution to support the growth.”

The locations were analysed on the basis of talent pool, infrastructure, social environment, business enablers, government support and cost of operations.


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