Bangalore Going Bust

There are no toasts being raised now to the city of a thousand pubs. The Garden City, where every Indian salaried professional dreamt of his own patch of green in the sun, now suffers from several post-industrial torments. India's metropolitan Camelot, where a financial spring reigned all year round, now records pollution levels second only to the national capital. The Silicon Valley of the subcontinent is a misnomer: massive power shortages are leading to a flight of industry. Bangalore is no longer the saving grace of urban India. Instead, on almost every front, the city is in depressing decline.

There was a time when the balmy breezes and infrastructural benefits of southern Karnataka motivated captains of industry to set up their base of operations here. But now, in India's computer capital a breath of fresh air is more difficult to access than a software programme. C. Ravikumar, a senior project manager says he no longer enjoys going outdoors. "Of what use is all this development if living standards don't improve?" he asks. Yet, only a few years ago, Bangalore was India's manufacturing Mecca. Infosys Technologies, the largest fully Indian-owned software company, arrived here over a decade ago. Tata Information Services Limited (TISL) chose Bangalore because it had a "high tech" focus. The excellent standard at universities ensured a fairly large base of technically trained manpower.

In addition the inexpensive rents, the orderly traffic and well developed civic sense of the people attracted other entrepreneurs. Wipro Systems, part of the Wipro Information Technology Group which exported software worth Rs 85 crore last year, started out well here. So did Delphi, a General Motors subsidiary which planned to enter India's automobile component market through Bangalore.

But the halcyon days are over. Infosys, with a market capitalisation of Rs 320 crore, is planning to relocate some of its business to Pune and Mangalore. And TISL, which according to Dataquest is India's seventh largest infotech company, is looking as far afield as Kochi and Thiruvananthapuram to expand. Even the electronics giant BPL is shifting investment worth Rs 600 crore to a site near Pune. "At this point of time, I think Bangalore is worse than Bombay or Delhi in terms of roads, power and water," says N.R. Narayana Murthy, CMD of Infosys.

An opinion poll conducted by a top transnational in Bangalore reveals thebusiness community is seriously reappraising the merits of further investment. "Bangalore no longer holds the same advantage it did four years ago. It has become necessary to look to cities where the needs of industry are met," the poll concludes.

Perhaps the city expanded too far too fast. The sudden efflorescence of urban life simply could not be sustained in what had once been a pensioners' retreat. The boom has taken a heavy toll and left a weary backwash. Old Bangaloreans lament the passing of the days of sunlight and roses. When N.J. Khan returned here after a few years in Saudi Arabia, he was shocked. "What was once a sleepy city has grown unplanned and the infrastructure is unable to support it," he says. Khan, who owns a business centre in the city, cites the power crunch and traffic chaos as major problems. "Traffic laws are followed more as an exception and people don't give a damn." When Khan was a student here, Bangalore was a "dream city". Today under-20s raise their umpteenth glass of draught beer and wonder if a better life lies elsewhere.

Where computer screens once flashed from every window, signalling that this was the first city of information technology in India, chronic power cuts have paralysed ordinary office functioning. "We face unscheduled power cuts about five times a day, each time between 30 minutes and an hour," says Dr A.L. Rao, vice-president of Wipro systems. The company has been forced to install a backup system so that its work isn't affected. Infosys too has to generate its own power and 25 per cent of the power needs of another software firm, Microland, comes from DG sets. The boom city is in danger of going bust, in the dark.

Nor are bad working conditions offset by good living conditions. Away from the elite Koramangala area, where luxurious bungalows rival those on Juhu Beach, the engineers and technicians who are taking Karnataka to the brink of the 21st century are increasingly finding it difficult to get a decent place to live in. Says Syed Beary of Beary's Real Estates, Properties and Developments: "Office space rents have appreciated by over 60 per cent in the last year-and-a-half. In some areas they have doubled." As rent-ravaged yuppies fled Bombay, Bang-alore was seen as the second-best option. "Now prices have gone beyond the reach of eventransnationals," says Beary.

Anil Sachchar, general manager of B. Sohrabji Exports, moved in from Bombay five years ago, hoping for lower rents. Now he is beset with the same Mumbai-esque problem. "Ever since I came here, rentals have increased crazily by four or five times. And most of it is speculative or camou-flaged. The owners feel, chalo Bombay ka admi hai, and quote unrealistic prices." Constructed residential space in prime areas like Koramangala, Indiranagar and Frazer Town have seen rent increases of 120-125 per cent over the last year. Monte Harris, CMD, Verifone India, says employees can't afford to pay the spiralling rents because there are no rent controls. Adds Dr Rao of Wipro systems, "A new engineer just cannot afford to rent a house in Bangalore anymore."

Bangalore is the accidental utopia; it isan indication of what happens when a pretty small town becomes a big mean city in too short a time. It is a metaphor for liberalising India where development without investment in infrastructure ultimately frustrates progress.

Narrow roads were never meant to cope with a booming economy. Now almost 8.5 lakh vehicles, of which nearly 6.2 lakh are two-wheelers, clog up what were once leafy promenades for septuagenarians and their dogs. Bangalore has the second highest number of vehicles after Delhi but there are no main highways or truck terminals. As a result, says DCP Traffic H.C. Kishore Chandra, around 8,000 trucks and other monsters rumble through the carbon monoxide-filled streets designed with modest objectives.

Electronics engineer Lakshman Vijanbi says he has stopped visiting friends because of the state of the roads. And sales executive Jagdish Chandrashekhar no longer goes jogging—the last time he did so, a two-wheeler ran over his leg. "I don't like the place anymore," Vijanbi says.

The rising population—now estimated at 50 lakh—jostles for space in a city where it is more difficult to find parking space than in Bombay or Delhi. Only 300 policemen are available toman the 30,000 intersections as harried executives with beeping pagers rush to work at exactly the same time in the morning. "Bangalore lacked planning unlike other metros. It has grown haphazardly over the last 25 years," says Additional Commissioner of Police A.R. Infant.

Indeed nobody seems to have planned for Bangalore to become the fountainhead of industrial progress in India. It just happened. As high-tech public sector and R&D units mushroomed, nobody thought of investing in the support system for India's software genius. The city shuddered under the weight of its newfound glitter, but hardly any profits were ploughed back intoits depleted potential. Bangalore airport, originally built as a landing site for Hindustan Aeronautics Ltd with a capacity of 700 people, today handles about 6,000 passengers and around 2,000 visitors every day. Yet, unmindful of the way the 30 incoming and outgoing flights are stretching the facilities to breaking point, the state government has requested the Centre for more international flights.

Meanwhile, complaints about the rising cost of living are heard at every street corner. Says Antony Fernandes, proprietor of Paramount Studio in Malleswaram who moved here from Thiruvananthapuram 11 years ago: "The city has grown and so has my business. But though there has been an increase in competition, this has not translated into higher incomes." A senior government official who set up permanent residence here eight years ago now regrets his decision. "Those days this was like a hill station which offered everything a metro did. But now it is difficult to drive around the city and power cuts are the greatest curse."

Is the state government at all concerned about the plight of its capital? Clearly not enough. The genesis of Karnataka's power crunch lies in its disproportionate dependence on hydroelectricity, which falters in times of erratic monsoons. The state generates 3,400 mw of electricity as against the demand for 6,500 mw. While the daily demand in the state is 60 million units, the supply varies between 40 to 45 million units. Bangalore alone needs a daily unrestricted supply of 1,000 mw. Says a senior Karnataka Electricity Board (KEB) official on condition of anonymity: "The shortage will last forever unless enough funds are allocated and all proposed power projects in the state are put on the rails in five years."

The Bangalore City Corporation (BCC) is equally gloomy about the future of a city thathas had greatness thrust upon it. Says a BCC official, also requesting anonymity:"With the city witnessing the highest area-wise growth in Asia, the Rs 200 crorecollected as property tax—the only significant source of revenue for the BCC—ishighly inadequate for the task of providing basic amenities and maintaining thecity." In successive regimes, as political faction-fighting substituted forgovernance, Bangalore’s degeneration is an indictment of its rulers.

 Chief Minister H.D. Deve Gowda says he is determined to set things right. Anumber of new projects have been announced: an infotech park as well as an exportpromotion industrial park near Bangalore, a new airport of international standard, a newpublic transport system as well as strengthening the power distribution networks.

But investors are unimpressed: there simply do not seem to be any funds tooperationalise these brave new projects. In January, a 90-km light railsystem—Project Trains—supposed to run on elevated rails along the medians andcentre-lines of roads was announced with a great deal of fanfare. But with an estimatedcost of Rs 4,200 crore, the scheme is running far behind schedule. The government is stillunable to select the consortia to Build-Own-Operate Transfer it. The four-stage projectwas supposed to be complete by 2006 but only 16 km of the 62-km Ring Road is complete.Land acquisition problems are holding up construction since the road passes throughdefence and railway land. The traffic police had designed an alternate Ring Road to diverttransit traffic from the main city streets. But this proposal (estimated cost Rs 35 crore)is still awaiting a bank guarantee.

The Rs 30-crore project to improve the power distribution system is also cash-strapped.The KEB hopes to get aid from the Power Finance Corporation or the Asian Development Bank.But Karnataka’s record in revenue collection from power consumers is abysmal. In1993, the World Bank withdrew a Rs 700-crore aid offer because the government refused tolevy a tariff on irrigation pumpsets—a move that may have cost the government a largechunk of votes. At the moment, about 50 per cent of the total power available to the stateis distributed to the irrigation sector free. The ruling Janata Dal is assiduous incourting foreign investment but even these market-friendly socialists cannot afford toabandon their rural constituency entirely.

"There’s a tremendous strain on infrastructure," says state IndustriesMinister R.V. Deshpande. "Various decisions have to be taken to ease this pressure.And I admit we don’t have a wand to weave miracles. We’ve been in government foronly nine months."

 Deshpande says the immediate solution could be to relocate industries to sitesoutside Bangalore, developing long-term projects like satellite towns. "I want totell the investors to bear with us till we are able to provide the infrastructure.Otherwise they are free to go out if they can get better facilities elsewhere."

Meanwhile the chief minister keeps up a punishing schedule: meeting the multitude of investors who knock at his door, placating agitated delegations of auto drivers and issuing statements to promote the film industry. But there's one call he never fails to make: to the Union Power Ministry to "come to the rescue of the state".

India's New Jerusalem may soon become its forbidden city; the promised land where the streets are paved with microchips is in danger of losing its competitive advantages. Today leaders of industry are looking beyond Bangalore towards the next unspoilt Eden. Referring to his company's future plans, John R. Whiting, president and managing director of TISL, says: "We have picked a city very similar to what Bangalore used to be."