Last week, during lunch with a Dutch businessman who has lived and worked in India for 12 years and a young professor at the prestigious Indian School of Business in Hyderabad, the topic of Bangalore as a feasible base for business came up. The Dutch entrepreneur, who has spent a significant amount of time in this city working with the preserved foods industry began with a long rant against former Prime Minister HD Deve Gowda and his son, the former Chief Minister HD Kumaraswamy. “I’ve been around, doing business during the SM Krishna administration and also during this mockery of a coalition government. How these people (Gowda and Kumaraswamy) have treated businesses and businessmen disgusts me,” he said. “I visit Bangalore often (he lives and works in Dindigul) and frequently speak to businessmen and entrepreneurs about the costs of doing business in Bangalore, and off late, have been hearing the same thing: it just doesn’t make sense for people to set up new businesses in this city. In fact, Hyderabad and Chennai are talked about as preferred destinations,” he added.
Though he doesn’t profess an intimate knowledge of Karnataka politics, the Dutch businessman follows closely developments that directly affect his bottom-line. “It became very clear to us, in the business fraternity, that Deve Gowda had decided to deliberately undo what the previous governments had put in place when he disbanded the Bangalore Agenda Task Force and later took on corporates like (Infosys Chief Mentor) Narayana Murthy. Doing something like this just to prove that you are pro-farmer is ridiculous. He could have carried on with his pro-agrarian policies while continuing with developmental work in Bangalore and allowing existing and new companies to flourish. Instead, he put roadblocks all along – with the NICE Corridor, because it would hurt his personal interests; with granting land to IT firms, because he wanted to underscore his anti-urban agenda… the list is endless,” the businessman said. According to him, what the former coalition government has achieved with its policies is to put doubt in the minds of entrepreneurs and multinationals looking to invest in the city. “These guys seemed to be more interested in taking out protest rallies and washing their dirty linen in the streets than to pay attention to quickening projects like the Elevated Highway project linking the Electronics City to the city. If you compare the state of affairs here with that in Hyderabad, you’ll see a huge difference. (Andhra Pradesh Chief Minister) YSR Reddy might be opposed to (former AP Chief Minister) Chandrababu Naidu’s pro-Hyderabad stance, but you don’t see him deliberately sabotaging works undertaken to attract investments to that city,” he said.
The professor from the Indian School of Business, who splits his time between New York and India immediately agreed. “That’s one of the main reasons why Bangalore is losing its sheen in the international community. I hear this very often at conferences I attend and during conversations with prominent investment bankers. They talk about Bangalore in the past tense: when the going was good and the reforms were in place. Now, I would be embarrassed to bring someone who wants to invest a few million dollars in India to Bangalore. Look at the sad state of the infrastructure. The coalition government seems to think no one outside India is looking at the farce that’s playing out here. But what they don’t understand is that many multinationals – Cisco, Dell, Microsoft, Toyota, Oracle – have serious sums of money invested in this city. And when they see a government squabbling like this and shooting itself in the foot, they naturally interpret it as a sign of complete immaturity. That’s when they start looking at cities like Chennai and Hyderabad as more professionally run cities to locate their businesses in,” he said.
The professor also has a more personal reason to examine the decay of Bangalore closely. Early next year, he will move back to India to help set up businesses and study the viability of various funds investing in new businesses. “If, for instance if Soros Fund Management, which has recently started looking at India as an investment destination very closely (Chairman of the Fund, George Soros, visited India for the first time in December 2006, to look at investment opportunities), were to decide to come to Bangalore, I can guarantee you that with the sort of governance and petty politics going on, they will have no choice but to look at another city,” he said. “When I decided to move back to India, Bangalore was my preferred choice. I have spent a considerable time here and have watched the city grow. But now, when I visit this city, I see everything’s gone to the dogs – you have terribly planned flyovers, you have no efficient means of public transport, every aspect of infrastructure in this city has deteriorated. With all this, not only will I hesitate to advice my clients to invest money in Bangalore, but am actually considering setting up base in Hyderabad,” he added.
