A word of caution for Bangalore: Poor infrastructure, high crime rate and cost of living index could result in other cities getting larger share of the business investment pie.
A word of caution for Bangalore: Poor infrastructure, high crime rate and cost of living index could result in other cities getting larger share of the business investment pie.
A recent study by Zinnov—a market expansion advisory firm—says that though Bangalore is still the Number 1 destination for software R&D activity in the country, cities like Hyderabad, Chennai, Pune and NCR are gaining good traction among MNCs.
For instance, real estate rentals in Bangalore are higher than what it is in Pune, Hyderabad or Ahmedabad.
As far as Hyderabad is concerned, the growth in the city hit a low owing to the political situation in the state. Hence the rentals are not too high. However, Bangalore is cheaper than NCR and Chennai, said a real estate broker.
Even when it comes to cost of living index, Bangalore scores poor, coming second after NCR. Chandramouli C S, senior director, globalisation advisory, Zinnov, says cost of living for companies will include the amount spent on infrastructure apart from salaries. The pay structure for employees of a company will not vary much between cities, he said.
To establish their states as major IT hubs, many IT associations in the country are making efforts to attract investments. For instance, Andhra Pradesh has IT & ITeS Industry Association. The association has played a vital role in lobbying for incentive policy and branding the state as an IT destination. Similar associations are there in Gujarat and Pune .
Even Karnataka has an association, though it is not as active as its counterparts in other states. That is mainly because Karnataka is well known as a software R&D destination. There is not much scope to market, said Chandramouli.
Gujarat’s ‘Vibrant Gujarat’ is the most successful branding campaign in India, he said.
He said that despite having an excellent IT infrastructure, Bangalore’s transportation facility is poor, an area where Hyderabad scores. However, on other parameters like hotel infrastructure and international connectivity, Bangalore is a cut above Chennai, Hyderabad and Pune.
Also, the talent pool available in Bangalore is unmatchable. It has a conducive environment. The climatic here is incomparable, said JR Bangera, president of FKCCI.
The city is a favourite among expatiates because of excellent climate and cultural diversity, he added.
A senior official of an IT firm said companies are definitely looking at Pune, Chandigarh and Hyderabad to set up their second centre.
However, when it comes to the degree of business continuity risk, Bangalore is less preferred, thanks to the high crime rate ratio in the city. According to National Crime Rate Bureau, Bangalore registered the maximum number of crimes under IPC in 2010 after Jaipur.
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