Kolkata your new IT Destination Government of West Bengal No part of it may be circulated, quoted, or reproduced for distribution outside the client organization.

Kolkata your 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.

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CONTENTS

•West Bengal – Facts

•An offer you cannot refuse

•West Bengal – Facts

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WEST BENGAL – THE REALITY

Reality

Economy • 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

• Fastest growing STP with 175 companies employing 15,000 IT professionals

• TCS, Cognizant, Wipro, IBM, CA, NIIT, AIG have centres

IT Industry

• Lowest cost of operations - Cheapest power, lowest attrition, lowest cost of living

• Attractive fiscal incentives

Cost

• 3rd best place to live in - survey by Outlook Money• Best-in-class clubs, recreation centres, museums

Social set-up

• Not a single reported case of labour trouble in IT• Proactive stance of Government to work disruption

Labour

• Most political stable state • Investor friendly Government

Government

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THE STATE’S IT SECTOR HAS SEEN EXCELLENT GROWTH

Source: STPI; STP Kolkata

Kolkata is the fastest growing STP of the country

Percent; Growth rates of STPs in 2001-2003

119

46

45

36

29

36

Kolkata

Chennai

Maharastra

Hyderabad

Bangalore

All India

5

KOLKATA IS AN IMPORTANT CENTRE FOR MANY COMPANIES

Source: Webel; Company Interviews

• 4th largest centre in the country• 2,100 IT professionals

• Planned to be 2nd largest centre after Bangalore• 1,500 professionals employed today and will

increase to 4,000 by 2004

IBM

• 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

6

THERE HAVE BEEN NO LABOUR PROBLEMS EVER AMONG IT PROFESSIONALS

HR experience here has not been different

from our other locations

(We) have experienced no labour-related problems in

the Kolkata centre

United has had no problems at all in

Kolkata

We have had no labour disputes in ITC Infotech

IT enabled services has been

provided ‘Public Utility’ status

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CONTENTS

•West Bengal – Facts

•An offer you cannot refuse •An offer you cannot refuse

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WEST BENGAL IS WELL POISED ON FIVE KEY ENABLERS

TalentCost of

operations

Infrastructure

Policy

Investor support

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Cost of operations

Infra-structure

Policy

Investor support

Talent

•Best education institutes

•Large pool of English speaking graduates

•Good domain knowledge

WEST BENGAL IS WELL POISED ON FIVE KEY ENABLERS

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COMPANIES CAN TAP A HUGE POOL OF QUALITY TALENT IN WEST BENGAL…

Source: India Today, Manpower profile of India; Team analysis

• 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

• 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• 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

IIM Calcutta

Presidency College

IIT Kharagpur

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DOMAIN KNOWLEDGE EXISTS IS MANY AREAS

Source: Manpower profile of India

• ~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

Banking, Finance Insurance

• 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

Travel & Logistics

• Over 2000 people enrol for French and 1100 enrol for German every year

Foreign Languages

• Nearby city of Jamshedpur houses India’s premier HR management education institute

• One of the largest sources of actuaries in India

Human Resource

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Cost of operations

Infra-structure

Policy

Investor support

Talent

•Lowest cost of living

•Lowest attrition rates

•One of the lowest power costs

•Attractive government incentives

WEST BENGAL IS WELL POISED ON FIVE KEY ENABLERS

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KOLKATA HAS LOWEST COSTS COMPARED TO OTHERS

*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

One of the lowest CMIE consumer price indices** among metros

438

443

418

413

378Kolkata

Bangalore

Hyderabad

Delhi

Mumbai suburbs

… as evident in lower salaries* for fresh graduates

110

90

84

70

84

66

Mumbai

Kolkata

Rs ‘000 p.a. (range)

Bangalore

Chennai

Hyderabad

Delhi

140

110

108

100

96

84

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WEST BENGAL HAS LOWEST ATTRITION LEVELS

Source: Interviews with IT companies, HR Consultants

Low attrition rate is a characteristic of the

culture here

Attrition rate of ITeS companies in metros

25

25

25

15

Delhi

Kolkata

Per cent

Mumbai

Bangalore

Chennai

Hyderabad

40

40

40

30

15

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

NASSCOMNASSCOM

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Kiran Karnik, President

Lakshmi Naranyanan, COO

15 30

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WEST BENGAL OFFERS THE MOST COMPETITIVE ELECTRICITY PRICES

Source:C B Richard Ellis

Comparison of basic tariffs in major IT destinationsRs / Unit

3.2

4.7

4.3

3.7

3.6

3.3

3.2

Gurgaon

Chennai

Chandigarh

Hyderabad

Bangalore

Kolkata

Mumbai/ Pune

NASSCOM & Gartner have

ranked the state No. 1 in power availability &

quality

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 is a surplus power state and net

exporter of power

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Rs 2.1 CRORE ONE TIME INCENTIVES

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)

Description Financial impact

• Subsidy @15% of fixed capital investment (ceiling Rs.150 lakh)

Rs. 150 lakhFCI subsidy

• Exemption from stamp duty and registration fee for purchase/ acquisition of land/buildings

6% of value of land/property

transfer

Stamp duty/ registration fee exemption

• Exemption from payment of consumption tax on material brought into state for initial construction

Rs. 60 lakhConsumption (Entry) tax exemption

• Subsidised land (around Salt Lake) for 1st few large ITeS anchor investors

Land at 20-30% of market price

Land subsidy

Total (excluding land subsidy) >Rs. 210 lakh

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RECURRING INCENTIVES OF ~ Rs 1.5 CRORE

• 50% of ESI and EPF contribution for every employee

Rs. 45 lakhEmployment generation subsidy

Total annual operating cost subsidy ~Rs. 152 lakh

• Subsidy on interest payments (50% of interest liability) – ceiling Rs. 100 lakh p.a.

Rs. 100 lakhInterest payment

subsidy • Electricity duty waived for 1st 5 years Rs. 7 lakhElectricity duty

waiver

No other state has a declared annual employment

or interest subsidy

Description Financial impact

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

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Cost of operations

Infra-structure

Policy

Investor support

Talent •Reliable telecom connectivity

• ‘Walk-in’ physical infrastructure

•Best-in-class local transport

•Excellent social infrastructure

•International accessibility

WEST BENGAL IS WELL POISED ON FIVE KEY ENABLERS

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KOLKATA OFFERS INTERNATIONAL CONNECTIVITY THROUGH BOTH SATELLITE AND CABLE

Kolkata

Chennai

Mumbai

Kochi

580 Mbps3 earth stations (VSNL and STPI) – one of the best in the country

VSNL uses BSNLOFC leased line 92 Mbps (29 E-1s, One 34 Mbps line) and provides SLA

Submarine cable

Submarine cable

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AVAILABILITY OF CABLE-BASED CONNECTIVITY WILL SEE A HUGE INCREASE SOON

Kolkata

Chennai

Mumbai

Kochi

More bandwidth and redundancy from BSNL

580 Mbps3 earth stations (VSNL and STPI) – one of the best in the country

ILD services from Bharti via Singtel landng station in Chennai (by Nov 2003)

Submarine cable

Submarine cable

Alternative national long distance loop from Reliance (by Dec 2003)

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SALT LAKE IT HUB IS WORLD CLASS

Source: Webel

• India’s first fully integrated Electronics Complex in Salt lake City, Kolkata

• Spread across 150 acres of green, pollution-free land near the airport

• Over 175 IT companies with 15,000 professionals

• Excellent infrastructure like roads, ATMs, food joints

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LAND EARMARKED TO MEET 2010 IT VISION

• Proposed IT park (up to 40 acres) at Nonadanga

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• 2-3 acre plots @ ~Rs 40 lakh per acre

• Existing IT hub in Salt Lake (Sector V)

2

• 100 acres available at Rajarhat – New Town (3 km from Salt Lake) for IT and ITeS units

1

2

3

1

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KOLKATA OFFERS BEST-IN-CLASS LOCAL TRANSPORT OPTIONS

• 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

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KOLKATA OFFERS EXCELLENT SOCIAL INFRASTRUCTURE

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KOLKATA IS WELL CONNECTED TO MAJOR INTERNATIONAL DESTINATIONS

Origin Destination

x (y.z)

x flights a week (flight time y hrs z min)

London

Kolkata

Singapore

Bangkok

2 (10.40)

10 (2.25)

Mumbai

Delhi

5 (4.05)

~50 (2.00)

~50 (2.20)

City Via Add.Time*

Weekly Freq.

LondonAms’damFrankfurtParisZurichNew YorkChicagoSFO

Del/BomDel/BomDel/BomDel/BomDel/BomBombayBombaySingapore

9.308.508.108.558.20

18.4019.3016.40

>251314

>1514143

>20

Europe / USA

City Via Add.Time*

Weekly Freq.

Tokyo

HKG

Sydney

SingaporeBangkokSingaporeBangkokSingaporeBangkok

6.405.453.452.457.108.45

>20>15>30>25>20>20

Asia / Australia

* Excludes flying time from Kolkata to transit destination

Source: Amadeus

Amsterdam

1 (12.25)

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Cost of operations

Infra-structure

Policy

Investor support

Talent

•Strong policy measures

•Strong e-governance and IT literacy initiatives

WEST BENGAL IS WELL POISED ON FIVE KEY ENABLERS

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THE STATE GOVERNMENT HAS ADDRESSED POLICY ISSUES RELATED TO IT OPERATIONS

•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 Allow self-certification for specific enactments such as National Holidays Act, Contract Labour Act, etc.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 Provide IT units establishment status under Shops and Establishments ActEstablishments Act

•Public Utility ServicePublic Utility Service status to the IT industry status to the IT industry

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E-GOVERNANCE INITIATIVES ARE BOOSTING IT AWARENESS

• 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

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Cost of operations

Infra-structure

Policy

Investor support

Talent

•Responsive, single window

•At set-up and during ongoing operations

WEST BENGAL IS WELL POISED ON FIVE KEY ENABLERS

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Key requirements of investor

WEBEL - SINGLE WINDOW SUPPORT CENTRE

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 • 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

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Buddhadeb BhattacharjeeChief Minister, West Bengal

“The Government will do what it

takes to get you to the state”

WEST BENGAL WILL DO WHAT IT TAKES TO ATTRACT YOU