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Kolkata your new IT Destination

Kolkata your new IT Destination. Government of West Bengal.

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Kolkata your new IT Destination

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  1. Kolkatayour new IT Destination Government of West Bengal No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from Government of West Bengal. This material was used by Government of West Bengal during an oral presentation; it is not a complete record of the discussion.

  2. West Bengal – Facts CONTENTS • West Bengal – Facts • An offer you cannot refuse

  3. 4th fastest growing state in the country (ahead of Maharashtra and A.P) in the post-reform years • 4nd highest inflow of investments in recent years Economy IT Industry Cost Social set-up Labour Government • Fastest growing STP with 175 companies employing 15,000 IT professionals • TCS, Cognizant, Wipro, IBM, CA, NIIT, AIG have centres • Lowest cost of operations - Cheapest power, lowest attrition, lowest cost of living • Attractive fiscal incentives • 3rd best place to live in - survey by Outlook Money • Best-in-class clubs, recreation centres, museums • Not a single reported case of labour trouble in IT • Proactive stance of Government to work disruption • Most political stable state • Investor friendly Government WEST BENGAL – THE REALITY Reality

  4. THE STATE’S IT SECTOR HAS SEEN EXCELLENT GROWTH Kolkata is the fastest growing STP of the country Percent; Growth rates of STPs in 2001-2003 Kolkata Chennai Maharastra Hyderabad Bangalore All India Source: STPI; STP Kolkata

  5. KOLKATA IS AN IMPORTANT CENTRE FOR MANY COMPANIES • 4th largest centre in the country • 2,100 IT professionals IBM • Planned to be 2nd largest centre after Bangalore • 1,500 professionals employed today and will increase to 4,000 by 2004 • 2nd largest centre after Chennai • Investing in new facility in Kolkata • JV between The Chatterjee group (TCG) & United Airlines • Strength to double by 2004 • Centre for 2500 IT professionals to be commissioned by January 2004 • Spectramind’s 4th centre is being set-up in Kolkata Source: Webel; Company Interviews

  6. (We) have experienced no labour-related problems in the Kolkata centre HR experience here has not been different from our other locations United has had no problems at all in Kolkata We have had no labour disputes in ITC Infotech THERE HAVE BEEN NO LABOUR PROBLEMS EVER AMONG IT PROFESSIONALS IT enabled services has been provided ‘Public Utility’ status

  7. An offer you cannot refuse CONTENTS • West Bengal – Facts • An offer you cannot refuse

  8. Cost of operations Talent Investor support Infrastructure Policy WEST BENGAL IS WELL POISED ON FIVE KEY ENABLERS

  9. Best education institutes • Large pool of English speaking graduates • Good domain knowledge Cost of operations Talent Investor support Infra-structure Policy WEST BENGAL IS WELL POISED ON FIVE KEY ENABLERS

  10. Huge annual intake of under-graduate students • Over 545,000 enrol for graduate courses (including about 120,000 in commerce & 330,000 in arts/ education) in 3 yrs • Annual intake in engineering colleges is ~ 13,000 COMPANIES CAN TAP A HUGE POOL OF QUALITY TALENT IN WEST BENGAL… IIM Calcutta • Some of the finest educational institutions in India • 52 engineering colleges, 400 other colleges, 12 universities • Two colleges (Presidency and St. Xaviers) ranked among the Top-10 degree colleges IIT Kharagpur • Good English language skills • About 30,000 pass out every year from English medium schools (Kolkata has largest number of ICSE schools) • Companies perceive graduates to have neutral accents • Hinterland of North-East provides access to quality talent Presidency College Source: India Today, Manpower profile of India; Team analysis

  11. ~1,20,000 students enrol (across 3 years) for commerce • Country’s largest life insurer, LIC, runs largest operations • One of the leading non-life insurer, NIC, headquartered in WB • 15 foreign/private banks operational; HQs of 3 large banks • Dedicated software units for airlines and shipping business • One of the largest port complexes (Kolkata and Haldia) • Acts as a transportation hub for 11 Indian states • Nearby city of Jamshedpur houses India’s premier HR management education institute • One of the largest sources of actuaries in India Banking, Finance Insurance Travel & Logistics Foreign Languages Human Resource • Over 2000 people enrol for French and 1100 enrol for German every year DOMAIN KNOWLEDGE EXISTS IS MANY AREAS Source: Manpower profile of India

  12. WEST BENGAL IS WELL POISED ON FIVE KEY ENABLERS • Lowest cost of living • Lowest attrition rates • One of the lowest power costs • Attractive government incentives Cost of operations Talent Investor support Infra-structure Policy

  13. KOLKATA HAS LOWEST COSTS COMPARED TO OTHERS One of the lowest CMIE consumer price indices** among metros … as evident in lower salaries* for fresh graduates Rs ‘000 p.a. (range) Mumbai 140 Bangalore 110 Delhi Hyderabad Bangalore 108 Delhi Chennai 100 Mumbai suburbs Hyderabad 96 Kolkata Kolkata 84 * Estimates provided by a leading HR agency with Nationwide footprint ** Urban non-manual workers , June 2003 (CMIE) Source: Manpower profile of India; Interviews with HR Consultants; CMIE

  14. Low attrition rate is a characteristic of the culture here NASSCOM WEST BENGAL HAS LOWEST ATTRITION LEVELS Attrition rate of ITeS companies in metros Kolkata's strength is low attrition rate, which is embedded in the culture - people won't leave jobs for a Rs 500 p.m. increment Per cent Delhi 40 25 Kiran Karnik, President 40 Mumbai 25 40 25 Bangalore 30 Chennai 15 30 Hyderabad 15 Lakshmi Naranyanan, COO Kolkata 10 15 Source: Interviews with IT companies, HR Consultants

  15. NASSCOM & Gartner have ranked the state No. 1 in power availability & quality West Bengal is a surplus power state and net exporter of power WEST BENGAL OFFERS THE MOST COMPETITIVE ELECTRICITY PRICES Comparison of basic tariffs in major IT destinations Rs / Unit Chennai Gurgaon Chandigarh Hyderabad Bangalore Kolkata Mumbai/ Pune Source: C B Richard Ellis

  16. Financial impact Description FCI subsidy • Subsidy @15% of fixed capital investment (ceiling Rs.150 lakh) Rs. 150 lakh Stamp duty/ registration fee exemption • Exemption from stamp duty and registration fee for purchase/ acquisition of land/buildings 6% of value of land/property transfer Consumption (Entry) tax exemption • Exemption from payment of consumption tax on material brought into state for initial construction Rs. 60 lakh Total (excluding land subsidy) >Rs. 210 lakh Land subsidy • Subsidised land (around Salt Lake) for 1st few large ITeS anchor investors Land at 20-30% of market price Assumptions • Project Fixed Capital investment of at least Rs.10 crore • Value of material brought into WB from other states during set-up is ~Rs.15 crore (consumption tax 4-12% in WB) Rs 2.1 CRORE ONE TIME INCENTIVES

  17. Financial impact Description Employment generation subsidy • 50% of ESI and EPF contribution for every employee Rs. 45 lakh Interest payment subsidy • Subsidy on interest payments (50% of interest liability) – ceiling Rs. 100 lakh p.a. Rs. 100 lakh Electricity duty waiver • Electricity duty waived for 1st 5 years Rs. 7 lakh Total annual operating cost subsidy ~Rs. 152 lakh Assumptions • 1200-person ITeS centre with average ESI and EPF contributions of Rs.600 per person p.m • Electricity consumption is about 150 units per employee per month RECURRING INCENTIVES OF ~ Rs 1.5 CRORE No other state has a declared annual employment or interest subsidy

  18. WEST BENGAL IS WELL POISED ON FIVE KEY ENABLERS Cost of operations Talent • Reliable telecom connectivity • ‘Walk-in’ physical infrastructure • Best-in-class local transport • Excellent social infrastructure • International accessibility Infra-structure Investor support Policy

  19. VSNL uses BSNLOFC leased line 92 Mbps (29 E-1s, One 34 Mbps line) and provides SLA Kolkata 580 Mbps 3 earth stations (VSNL and STPI) – one of the best in the country Mumbai Submarine cable Kochi Chennai Submarine cable KOLKATA OFFERS INTERNATIONAL CONNECTIVITY THROUGH BOTH SATELLITE AND CABLE

  20. Alternative national long distance loop from Reliance (by Dec 2003) More bandwidth and redundancy from BSNL Kolkata 580 Mbps 3 earth stations (VSNL and STPI) – one of the best in the country Mumbai ILD services from Bharti via Singtel landng station in Chennai (by Nov 2003) Submarine cable Kochi Chennai Submarine cable AVAILABILITY OF CABLE-BASED CONNECTIVITY WILL SEE A HUGE INCREASE SOON

  21. Over 175 IT companies with 15,000 professionals • Excellent infrastructure like roads, ATMs, food joints SALT LAKE IT HUB IS WORLD CLASS • India’s first fully integrated Electronics Complex in Salt lake City, Kolkata • Spread across 150 acres of green, pollution-free land near the airport Source: Webel

  22. 2-3 acre plots @ ~Rs 40 lakh per acre • Existing IT hub in Salt Lake (Sector V) • Proposed IT park (up to 40 acres) at Nonadanga • 100 acres available at Rajarhat – New Town (3 km from Salt Lake) for IT and ITeS units 3 1 2 LAND EARMARKED TO MEET 2010 IT VISION 1 2 3

  23. Only State with fully functional underground train network • Plans to connect Salt Lake Area by 2004 • Multiple modes of local transport exist like underground trains, buses, taxis, trams, circular railway • State has strengthen road network further • Gariahat Flyover, largest urban flyover (2.5 Km) commissioned in record time of 368 days • New road to Airport from Salt Lake (IT hub) • To be commissioned by Nov 2003 • Will decrease commute time from airport to 20 mins from IT hub KOLKATA OFFERS BEST-IN-CLASS LOCAL TRANSPORT OPTIONS

  24. KOLKATA OFFERS EXCELLENT SOCIAL INFRASTRUCTURE

  25. KOLKATA IS WELL CONNECTED TO MAJOR INTERNATIONAL DESTINATIONS Origin Destination x (y.z) Amsterdam x flights a week (flight time y hrs z min) 1 (12.25) London Delhi ~50 (2.00) 2 (10.40) Kolkata Mumbai ~50 (2.20) 5 (4.05) Europe / USA Asia / Australia Weekly Freq. Weekly Freq. Add. Time* Add. Time* City Via City Via 9.30 8.50 8.10 8.55 8.20 18.40 19.30 16.40 Del/Bom Del/Bom Del/Bom Del/Bom Del/Bom Bombay Bombay Singapore London Ams’dam Frankfurt Paris Zurich New York Chicago SFO >25 13 14 >15 14 14 3 >20 6.40 5.45 3.45 2.45 7.10 8.45 Singapore Bangkok Singapore Bangkok Singapore Bangkok Tokyo HKG Sydney >20 >15 >30 >25 >20 >20 10 (2.25) Bangkok Singapore * Excludes flying time from Kolkata to transit destination Source: Amadeus

  26. Cost of operations Talent Investor support Infra-structure Policy • Strong policy measures • Strong e-governance and IT literacy initiatives WEST BENGAL IS WELL POISED ON FIVE KEY ENABLERS

  27. Public Utility Service status to the IT industry • Permission for women to work at night and permission to run three shifts irrespective of national holidays • Allow self-certification for specific enactments such as National Holidays Act, Contract Labour Act, etc. • Relaxations in building and zoning laws (e.g., ability to construct centre in residential areas) • Provide IT units establishment status under Shops and Establishments Act THE STATE GOVERNMENT HAS ADDRESSED POLICY ISSUES RELATED TO IT OPERATIONS

  28. West Bengal State-wide WAN (WBSWAN) • 2 Mbps OFC network for data, voice and image communication • Connecting Kolkata to all district headquarters • To extend to 341 blocks and 3660 panchayats very soon • Application Service Provider (ASP) model to provide public interface to government information • Geographical Information Systems for Municipalities • Computerisation of government departments (including land records) • Aggressive IT literacy program (schools/colleges) in partnership with companies like Microsoft, IBM, HCL, NIIT, Wipro and Tata Infotech E-GOVERNANCE INITIATIVES ARE BOOSTING IT AWARENESS

  29. Cost of operations Talent Investor support Infra-structure • Responsive, single window • At set-up and during ongoing operations Policy WEST BENGAL IS WELL POISED ON FIVE KEY ENABLERS

  30. Key requirements of investor Rental space availability • Helps the company in obtaining space on rent/lease in buildings owned by Webel and private entrepreneurs Land procurement • Keeps tab on land availability. Allocates as and when available Telecom infrastructure • Interacts with BSNL to help procure last-mile connectivity Power connections WEBEL • Interacts with WBSEB to get power connections Building approval • Forwards building plans after preliminary check to local Municipality to expedite clearances STPI registration • Authorised to give STPI registration on behalf of STPI WEBEL - SINGLE WINDOW SUPPORT CENTRE

  31. WEST BENGAL WILL DO WHAT IT TAKES TO ATTRACT YOU “The Government will do what it takes to get you to the state” Buddhadeb Bhattacharjee Chief Minister, West Bengal

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