Saturday, January 28, 2006

Gearing up for IT

The Chandigarh region is on its way to becoming a major IT centre. Ruchika M. Khanna looks at the strain the upcoming industry would put on the existing infrastructure and how the authorities concerned plan to tackle it.

The entire Chandigarh-Mohali-Dera Bassi-Panchkula-Baddi belt is on the threshold of a major socio-economic infrastructural transformation as the area is fast emerging as the largest information technology (IT) and industrial hub in North India.

In the South, Bangalore and Hyderabad are getting too congested and the infrastructure present has failed to catch up with the rapid industrial growth there. With the Chandigarh Administration and governments of Punjab, Himachal Pradesh and Haryana luring IT and other industry with attractive sops, the stage seems perfect for industrial revolution here.

Quark, Dell, Infosys, IBM Daksh and IDS have already set up their facilities in Chandigarh and Mohali. Major pharma companies, Fast Moving Consumer Good (FMCG) manufacturers, top real-estate developers are also setting foot in Baddi in Himachal Pradesh, and Dera Bassi and Zirakpur in Punjab. "An investment of Rs 100,000 crore — of which Rs 50,000 crore is expected in Baddi — will be made in this belt during the coming years," informs Krishan Goyal, Chairman, Confederation of Indian Industry (CII), Chandigarh Council.

For long regarded as a haven for the retired, the industrial growth in this region will not only bring a major socio-cultural change but also put a strain on the existing resources and infrastructure. In another five to ten years, with an estimated 50,000 professionals coming in for jobs in the IT sector in Chandigarh and Mohali, and a similar number of professionals in Baddi, the challenge that lies before the four governments is to build and expand the existing infrastructure.

This industrialisation will also bring in a new way of life, specially suited to these professionals. Thus, there would be more shopping malls, multiplexes, international fast food centres and fine dining restaurants, and better air link with Mumbai and Bangalore. This could also mean that professionals trained in this region would get jobs here itself, and migration to other cities could be contained. On the flip side, increased population would mean more vehicles, traffic jams; higher land prices; haphazard development in the periphery and a vertical growth of City Beautiful.

Promise of growth

The Rajiv Gandhi Chandigarh Technology Park: Ready to woo the IT industry.
The Rajiv Gandhi Chandigarh Technology Park: Ready to woo the IT industry. — Photos by Parvesh Chauhan

Though Chandigarh is the most well planned city in the country, it had little to offer to its youth, trained in the best professional colleges here. The migration of youth to Category A cities like Delhi, Mumbai, Bangalore and Pune was a necessity. As a result, the region’s demographic profile constituted mainly of senior citizens, traders, or government employees.

Chandigarh is a major human resource base, thanks to the professional colleges and Panjab University churning out the best technical brains. In order to utilise this human resource, the Chandigarh Administration came up with the idea of setting up a technology park. Thus, the Rajiv Gandhi Chandigarh Technology Park (RGCTP) was envisaged. Punjab too has been wooing IT companies by allotting land dirt cheap, and offering them other sops such as tax benefits and giving it the status of special economic zone.

An investment flow of Rs 200 crore is expected in the ongoing first phase of the RGCTP’s growth. As its expansion takes place, we expect an investment of another Rs 700-800 crore. IT companies will offer at least 20,000-25,000 jobs in Chandigarh alone. An investment flow of Rs 200 crore is expected in the ongoing first phase of the RGCTP’s growth. As its expansion takes place, we expect an investment of another Rs 700-800 crore. IT companies will offer at least 20,000-25,000 jobs in Chandigarh alone.
 — Vivek Atray, Director, IT, Chandigarh


The industrialisation of this belt began in the early 1990s, when a number of poly spinning mills were set up in Dera Bassi and Lalru. Spurred by the high human resource index of Chandigarh, industries were also set up in Mohali and Panchkula. Some top-of-the-line companies like Chatha Foods, Punjab Meat Limited (both exporters of packaged food), JBCL (bus body builders), Rana Polycot and Wockhardt were established here during that time. A biotechnology park is now also coming up at Dera Bassi.

With the neighbouring state of Himachal Pradesh offering a tax holiday, a number of industries have set up operations in the Baddi- Barotiwala belt. As of now, about 200 industries have come up there, including 80 pharmaceutical companies, textile units, forging units and FMCG companies like Godrej, Hindustan Lever and Pan Parag.

IT companies such as Quark, Dell, Infosys and IDS have already set up their facilities in Mohali, with Infosys now ready to shift to the RGCTP. DLF too is setting up office at Chandigarh, while IBM Daksh, Outerbay and Bharti are other companies coming to the RGCTP. Wipro has been allotted 20 acres in Chandigarh and 40 acres in Mohali, while TCS, too, is coming to Mohali. Interestingly, while it took years for the IT sector in Bangalore, Hyderabad and Pune to evolve from the BPOs (business process outsourcing) and KPOs (knowledge process outsourcing) to software development, the IT companies here have already started with development of software. Following the success of the two IT parks here, the Haryana Government, too, is planning to set up its IT Park at Panchkula.

Vivek Atray, Director, Information Technology, Chandigarh Administration, says that this region will see a huge growth in the IT sector. He says an investment flow of Rs 200 crore is expected in the ongoing first phase of the growth of the RGCTP. "As the expansion of the RGCTP takes place, we expect an investment of another Rs 700-800 crore. IT companies will offer at least 20,000-25,000 jobs in Chandigarh alone," he says.

Though there are about 70-odd technology colleges in Punjab and Haryana that churn out IT professionals each year, the important question is that are these professionals trained to suit the needs of the IT industry. Atray admits, "Initially there was some lacunae in the course curriculum, which is why, we introduced C-TOSS—a course designed in consultation with the IT companies—in most government schools and colleges in and around Chandigarh. After all, industrialisation has to have a cascading effect on the social fabric. Thus, a private- public education partnership has been created, so that locally trained youth can be absorbed in these companies."

Vivek Mathur, Site Director, Dell, Mohali, says that initially they had to train fresh recruits from this region. This is one of the reasons that they were getting 50 per cent of the recruits from other cities. "But not any longer. With C-TOSS being introduced in educational institutions here, we hope to make more use of local talent," he says. He says that with excellent heathcare, educational facilities and good quality of life, the region has immense potential.

The Bangalore way

A city originally planned for a population of six lakh is already bursting at its seams with a population of over 11 lakh now. Add to this, the three lakh population of Panchkula and four lakh population of Greater Mohali (Mohali, Zirakpur and Dera Bassi) the two towns more or less dependent on the educational and healthcare facilities of Chandigarh. This increase in population is putting a strain on the existing infrastructure and services—land, healthcare, education, power, water and roads.

With a limited land resource, no wonder property prices in the region are spiralling, and are considered amongst the highest in the country. Subhash Mangat, a leading property dealer in Chandigarh, says, "The current boom in the real estate is likely to continue, despite the unrealistic price hike." The price of a four kanal house in the city is about Rs 8. 50-9 crore, two kanal plot Rs 4-6 crore, and a one kanal plot about Rs 2-2.50 crore. A 14-marla house in the city varies from Rs 1.50 crore to 2.50 crore, depending on the sector and location of plot, while a 10-marla plot is being sold for anything between Rs 90 lakh to Rs 1. 25 crore. A good three-bedroom flat in the city is available between Rs 40 lakh and Rs 60 lakh, and in Panchkula and Zirakpur for Rs 30-50 lakh.

S. Mallaya, who hails from Cochin and has taken up a job in an FMCG company at Baddi, says that housing in the region is completely out of the reach of the common man. "The government should take steps to curb speculation and make property prices more realistic. Housing is the biggest concern faced by professionals coming here from outside."

Trade pundits say that the current boom is artificially created with financiers pumping in their money in real estate for making quick profits. As property fetches better returns than gold or investment in shares, anyone having a few lakhs to spare is investing in property here. Investors have now formed cartels and 50 per cent of the land deals are now being made by these cartels.

The periphery, a ten-mile cushion around the city, is seeing rapid violations and haphazard constructions. The Chandigarh Administration and the Punjab Government have already okayed the Apartment Act. In fact, the Administration recently gave a go-ahead for the construction of 10-ten storeyed flats (till date only three- storeyed flats were allowed in Chandigarh). Thus, the city will now grow vertically to accommodate thousands of professionals expected to come here.

Traffic jams, unheard of a few years ago, are now the order of day on the roads leading to Mohali and Panchkula besides traffic intersections near bus stand and other commercial places. The vehicular population in the city is estimated at over six lakh. Slum colonies have multiplied and an estimated 35 per cent of the population lives there.

M. L. Sarin, a leading advocate here, says that economic development should be commensurate with the infrastructure." Haphazard construction is witnessed everywhere. The northern sectors, having bungalows with wide open spaces, are slowly turning into concrete jungles, as houses get demolished to make way for apartments. As the population increases, there will be need for more housing, healthcare, water, power and wider roads. The Administration should first create infrastructure to accommodate so many people," he opines.

Vaishali T. Johnson, a young software professional, says that the city also needs to develop a service industry catering to the IT sector. "What most of the companies need is a good catering service for its staff in office and more five-star hotels where senior executives coming in from abroad or other metros can stay," she says.

Support services

Romi Malhotra, Managing Director, Dell International Services, India, has said though they were encouraged by the quality of manpower and were thinking of enlarging its centre at Mohali, peripheral and support services to IT companies have to be strengthened.

"If this region wants to attract more companies, peripheral and support services to the IT industry need to be strengthened. What is most needed is a flight that brings you to Chandigarh in the morning and takes you back to Delhi in the evening," he said.

There is little doubt that creating infrastructure now is the top priority with all four governments in the region. The Chandigarh Administration is working towards a slum-free city, and plans to construct 20,000 one-room tenements for the slum dwellers. The Administration has already set up e-sampark centres—a one-stop shop for all bill payments, that work from 8 am to 8 pm. This has been done to suit the needs of the young professionals.

To ease out traffic, a Mass Rapid Transport System (a monorail) is being planned to link Chandigarh , Panchkula and Mohali, and a local taxi service (dial-a-cab) will be introduced. For the housing needs, 10-storeyed flats have been allowed, and many old bungalows are being converted into apartments. The governments of Punjab and Himachal Pradesh, too, have given a go-ahead to scores of private developers to set up housing projects in Mohali, Zirakpur, Dera Bassi and Baddi. The Haryana Urban Development Authority (HUDA), too, hopes to cash in on the industrial boom in Baddi, by setting up a new township, New Panchkula, on the Pinjore- Nalagarh road.

S. C. Aggarwal, Principal Secretary, Industries, Punjab, says that Rs 200 crore has been sanctioned for development of infrastructure in Greater Mohali. "Finances are not a problem for creating infrastructure, because better infrastructure will attract more investment in the region. The government is now working on ensuring that the water and power needs in this region are suitably met," he added. Other than creating infrastructure, the industry feels that there is need to strengthen the single-window system.