V. Jayanth

Physical and social infrastructure needed

Nasscom identifies Pune, Chandigarh, Mysore, Madurai and Tiruchi for growth prospects

Availability of ‘A’ category commercial

real estate space is important

CHENNAI: It is not just the IT and ITES sectors that are growing and need to expand to smaller cities and towns. The development of industrial clusters, corridors, estates, hubs and a whole lot of units in the services sector has virtually choked the State capitals and their suburbs. Both States and the private sector recognise the need to shift to Tier II and Tier III towns to prevent further congestion in major cities and to propel the growth of smaller cities and towns.

The National Association of Software and Service Companies (Nasscom) has already identified a list of second tier cities and towns where development must take place. They include centres such as Chandigarh, Pune, Visakhapatnam, Vijayawada, Mangalore, Mysore, Kochi, Coimbatore, Madurai, and Tiruchi. Some of these towns, including Pune, Mysore, and Coimbatore, are already being crowded with new industries and IT/ ITES units. The pressure on these towns has begun to show, exposing once more the inadequacies of the systems, and the inability of the private sector and the government agencies to act in tandem to promote new investment centres.

What is it that the industry or the investor expects in emerging centres? A cross section of captains of industry and trade has some common demands as well as expectations peculiar to a particular sector.

Industry expectation

In general terms, they want better physical and social infrastructure in these towns. “Some industries and sectors have tried the SEZ type of development, but there appears to be a mixed response. Employees and their families do not want to be out of a town or thrown into a closed gated community. Though they welcome residential colonies, they still prefer to be an integral part of a town or society — not to live by themselves. They do not want to see the same faces day in and day out,” says a senior official of the Federation of Indian Chambers of Commerce and Industry (FICCI). Nowadays, such colonies and townships have become even more difficult to build, because acquiring land becomes a Himalayan task. Which is why, industry looks to government and its agencies to assist in this process. Physical infrastructure will include roads, transport, services, housing, air and rail connectivity, while social infrastructure should provide for educational institutions, health services, recreation facilities, and hotels.

Driving expansion

Since IT and ITES have been driving this expansion to second tier cities, it may be useful to get its perspective on this development. Cognizant’s Managing Director and President R. Chandrasekaran says: “The primary reason for the IT industry to be attracted to a Tier II city or a Tier III city is its educational infrastructure and the resultant quality talent pool. The second important criterion is infrastructure. Availability of ‘A’ category commercial real estate space, preferably with SEZ notification, good roads, airport with good connectivity, and good hotels, is important. Even if one or more of these may not exist initially, visible efforts to develop them in parallel become important. Otherwise, the initial enthusiasm will die down and companies may not grow in these locations.”

He suggests that State governments can even set up advanced R&D facilities in collaboration with the local universities so that technology skill base can improve in the long run.

But others who have been looking at Coimbatore now either find it difficult to get land, or that it is too costly to make it viable. Confederation of Indian Industry’s (CII) Coimbatore zone Chairman K. Thangaraj says: “We need a city where growth comes without much pain — growth where quality of life is not affected for any section of the society. The growth we have witnessed may only be the tip of an iceberg. Cities such as our’s must focus on a vision for the future. We should look at a Greater Coimbatore, inclusive of the suburbs, where land is still available. Horizontal growth can be planned, with specific areas earmarked for particular uses, and provided good connectivity."

Unless industry, government, and the local body work together to evolve a broad framework of infrastructure development in Tier II and Tier III towns, they will run into problems before long. Planning and its implementation hold the key.