December 1, 2008

West Bengal’s IT sector upbeat in spite of meltdown

Feature IT companies have significant expansion plans

KOLKATA: December 01, 2008--Major IT companies in Kolkata have no immediate plans to withhold or temporarily stall their investment or expansion plans even though the worldwide recession has not left Kolkata’s IT sector unaffected. In fact, Kolkata’s IT industry in Sector 5, Salt Lake City, is all set to enter new areas such as animation and gaming software, engineering services, and security software. The IT industry in Bengal has already established itself in key IT-enabled functions such as knowledge processing, consulting and back office services.
According to the September edition of the state government’s IT Newsletter posted on the net, the staff strength of Wipro’s Salt Lake BPO unit is slowly heading towards the 10,000 mark from its present strength of 4,500 people. In view of the company’s significant expansion plans in the city, Wipro has requested 90 acres of land in the second IT park in Kolkata’s Rajarhat township.

Meanwhile, HTMT Global Solutions has plans to invest Rs 400 crore ($80 million) towards new acquisitions in West Bengal. The company’s IT unit in Durgapur, about 200 kilometres away from Kolkata, already employs 150 people. The Durgapur unit serves Bharti Airtel.

Capgemini has also earmarked Kolkata as a major IT destination. The company has drawn a massive expansion plan and aims to acquire a 200,000 sq ft facility at New Town, Rajarhat, which would employ 1,700 people.

Another leading IT consulting company, Cognizant has plans to invest Rs 201 crore ($40 million) to extend its Kolkata facility. The plan includes an extension of its office space by another 500,000 sq ft to accommodate 5,000 employees.
HCL Infosystems has chosen Kolkata as the location of the company’s consulting center in system integration. The company plans to recruit 1,000 to 1,500 people in the coming year. Besides, many well known outsourcing companies like Genpact are choosing Kolkata as their main centre for handling global clients and India-to-India business.

Meanwhile, indigenous BPO units are coming up in various small cities in West Bengal, outside Kolkata. Although these are mostly small scale Indian-owned facilities, they are certainly enhancing employment opportunities. For instance, a company named Firstsource has launched its operations in Siliguri with plans to employ 500 people. The company’s Siliguri facility serves Vodafone.

The West Bengal IT sector is marked by low salaries and relatively low productivity levels in comparison with the other IT hubs in the country. However, this inadequacy is compensated by factors such as low attrition rates, easy availability of skilled and talented workers and a high standard of English communication skills among employees.

In the face of the current global economic meltdown plaguing international businesses, there is no doubt that some of the companies aiming for large scale investment in Kolkata may adopt a wait and watch policy. However, in the long run, the IT prospects in West Bengal continue to remain strong.

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