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Last Updated: Tuesday, 10 August, 2004, 23:04 GMT 00:04 UK
India's silicon valley faces IT exodus
By Sunil Raman
BBC correspondent in Bangalore

Indian IT workers at a software company in Bangalore, India
Indian IT workers at a software company in Bangalore, India
The Indian city of Bangalore must improve its infrastructure if it wants to hold on to vital IT business, company executives have warned.

The heads of some of the biggest companies in India's IT industry have asked the government of the southern Indian state of Karnataka to improve infrastructure in Bangalore, or they will move their businesses to other states.

Bangalore is considered India's silicon valley, with most bellwether companies such as Infosys and Wipro, as well as international companies such as Dell, Microsoft and IBM, operating there.

The high-profile delegation included bosses of top Indian IT companies Wipro and Infosys, as well as representatives from Dell, IBM, Intel, and Texas Instruments among others.

Unplanned growth

At the meeting with chief minister Dharam Singh and other senior ministers of Karnataka, the leaders discussed issues concerning Bangalore's unplanned growth, as well as the lack of adequate infrastructure in the state.

Mr Singh spoke to journalists after the meeting and said the IT chiefs complained about the condition of city roads, delay in construction of flyovers and other projects.

In the last fortnight, Wipro chief Azim Premji threatened to move out of Bangalore if measures to improve infrastructure in the city were not taken soon.

India's richest woman and head of biotech major Biocon, Kiran Shaw-Majumder, also said her company's expansion will take place outside of Karnataka.

These statements led to the state authorities meeting with the IT industry representatives on Tuesday.

Bangalore has 36% of India's share of software exports and the city contributes around 60% of Karnataka's gross domestic product.

Unruly traffic

The IT industry has complained about the city's infrastructure for a long time now.

Representatives say the government must take measures to improve the roads, manage unruly traffic, improve power supply and expedite building of flyovers, hotels and an international airport near the city limits.

Between 1981 and 2001, the city's population grew by 42% to reach 5.5 million.

The chief executive of Infosys, Nandan Nilekani, said his company planned to hire eight to ten thousand people this year and needed more space for its expansion plans within the state.

"If we cannot expand here then we will go elsewhere," Mr Nilekani said.

However, chief minister Dharam Singh said his government would try to speed up the infrastructure work, saying IT and biotechnology sectors would be given top priority.

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