Silicon versus plain con

Merely increasing the ‘‘spending’’ on rural education does not mean that we have ‘‘invested’’ in it. If we double the salaries of unionised teachers who do not turn up in rural schools, we would not have ‘‘invested’’ one extra penny in rural education. We would have simply ‘‘spent’’ money that would make the Rural Absentee/Ghost Teachers Union happy, but done nothing to extend or improve education to the rural poor.

Finance Minister P. Chidambaram understands this very well. That is why he has tried to focus the national debate on ‘‘outcomes’’ and not on ‘‘spending’’.

THE purpose of increased spending on education is not merely to ‘‘spend’’, but to ‘‘educate’’. Even a left-loving economist like Amartya Sen concedes in his book The Argumentative Indian that the unionised teachers in his home state of West Bengal systematically absent themselves from work while drawing salaries (we must call them ‘‘rents’’, not ‘‘wages’’) in excess of market levels and far more than that paid to diligent working teachers in his own NGO.

Similarly merely spending money on urban roads can make contractors richer. It need not and usually does not make roads better. Urban residents suffer not only from overspending which benefits contractors but from delays which benefit no one.

Quite frankly, if about a dozen flyovers were completed in the next three months, Bangaloreans will get disproportionate benefits even if the estimated project costs double. But of course what is likely to happen is that it will take three years and the total project costs will actually treble!

If our traffic nightmare is so bad, why don’t we work night and day? If floodlights can be used for cricket matches they can be used for construction sites. In Thailand they can complete pre-fab flyovers in a couple of weeks. Why should it take us years?

It is our tragedy that our agencies get trapped in litigation, disputes, stay orders and endless delay. The focus is on activity and spending, not on outcomes! This is the reason N.R. Narayana Murthy pleads for a ‘‘better urban governance model’’.

REFERRING to the English poet Shelley, the French biographer Andre Maurois had this to say: ‘‘He was a beautiful and ineffectual angel beating his wings in the void.’’

In India we are certainly ineffectual, if not beautiful and whether we are angelic or not, we do beat our wings in the void. We have endless discussions while the Koreas, Chinas, Malaysias and Thailands talk less and do more.

At the end of the day, both the city-dweller and the rural farmer in these countries are richer, healthier, more educated, more prosperous than their counterparts in India.

We need a strong IT industry. It is the one activity that has given us success and respect on the global arena that we can all be proud of. We also need a strong agriculture. Whoever suggested that there is anything win-lose about their relationship?

IT can help agriculture or it can be neutral. One does not in any way detract from the other. IT is non-polluting, not energy-intensive and is far less land-intensive than manufacturing or mining.

The ‘‘land’’ issue is in particular a completely irrelevant red herring. Obsolete and unimaginative laws regarding land classifications — for example, agricultural versus non-agricultural — and ceilings have rendered the smooth functioning of markets in land impossible.

Anyone, be he or she an Indonesian developer in West Bengal or the Indian Navy in Karwar or an IT company in Bangalore or a charitable hospital in Tamil Nadu or a chemical factory in Maharashtra, is simply unable to buy a large contiguous piece of land in the open market. You have to be dependent on the government acting as a middleman, acquiring it and turning around and selling it to you.

If the government does not wish to perform this function, why not deregulate the market in land? Instead of the government making profits as an intermediary, the owners — the rightful sons and daughters of the soil — will get the benefit of the price that a willing buyer is prepared to pay.

Till the laws are changed, any business that wishes to develop a reasonable-sized civil facility will have to buy from the government and later get pilloried for that.

There is another option. The business can decide to go to Guangzhou or Shanghai, which I am told are welcoming places!

WE are all in this together. Nobody in the IT sector is foolish enough to believe that longterm sustainable prosperity is possible for themselves without other sectors developing in tandem. But instead of getting into the ‘‘either-or’’ game, let’s just for a moment look at the ‘‘win-win’’ features.

The IT industry is responsible for 90 if not 100 per cent of Bangalore’s foreign tourist traffic. And guess what, one out of 10 of them does visit Belur, Halebid and Sravana Belagola. The IT industry is also responsible for the traffic congestion in Bangalore.

We can of course shut down the IT industry (something that would make the mayor of Guangzhou deliriously happy), reduce foreign tourists and solve the traffic problem.

Or we can build flyovers, roads and mass-transit systems (‘‘remember construction is labour-intensive’’), welcome foreign tourists (‘‘tourism is labour-intensive’’) and get on with building a prosperous state and country.

The author is chairman and CEO, MphasiS BFL Ltd, and a past chairman of Nasscom

Bangalore’s bug

WHEN Philips Software’s Bangalore-based, Dutch-born CEO, Bob Hoekstra, invited heads of other IT companies in the city for a conference at his office in central Bangalore earlier this year, a common request from his would-be guests was: ‘‘Can you schedule my talk in the morning or late evening?’’

Given Bangalore’s daily traffic congestion, Hoekstra’s guests did not want to spend an entire day commuting 10-20 km distances between the conference and their offices. They wanted to be accommodated while they travelled to work or back home from work.

Every working day in Bangalore, nearly 200,000 IT sector employees from the estimated 1,560 IT companies in the city spend a minimum of three hours commuting 10-20 km distances to and fro work. On a Sunday, travelling these distances would take a bare 30-45 minutes.

It’s no small wonder that the Bangalore IT industry — which recorded exports worth Rs 27,000 crore in financial year 2004-05 — has been crying itself hoarse about the city’s infrastructure, even as politics has threatened to obliterate the industry’s concerns.

‘‘There has been no decisive action on our basic demand: just better roads and traffic management. We cannot fix lunch meetings with clients anymore in the central parts of Bangalore,’’ complains Hoekstra as he watches rainwater being pumped out of an inundated ground floor at his software centre.

‘‘Bangalore’s civic agencies work in isolation of each other,’’ he mutters, ‘‘there is no system in place and no coordination. There is no governance at all.’’

WITH no proper transportation system and a vehicle ownership ratio of 36,571 per lakh population — the highest for the country — the pressure on Bangalore’s largely small-town roads is only mounting by the day.

‘‘It is not for want of plans that Bangalore is suffering. It is because these plans have come too late, after the government has slept for so long. So everything has collapsed now,’’ says R.K. Misra, vice-president, Flextronics India. Misra is also a member of the industry-government empowered committee for Bangalore’s infrastructure.

‘‘In the sadak-pani-bijli equation, sadak is Bangalore’s biggest requirement,’’ says Misra, ‘‘the Cauvery IV stage water supply plan can handle Bangalore’s water needs for a long time. Also, most IT companies are not dependent on external power generation.’’

Misra points to another, more recent cause for alarm. ‘‘Following heavy rains and the flooding of Bangalore,’’ he explains, ‘‘the management of lake beds has become a major concern. The catchment areas of most of Bangalore’s lakes have knowingly or unknowingly been lost to real estate. These catchment areas were connected to each other as a lake system that controlled flooding, we need to find a way to revive the drainage system.’’

WHILE politics does not feature as a direct concern when it comes to Bangalore’s infrastructure, every IT company head in the city appears to agree that Karnataka’s culture of political oneupmanship is the biggest roadblock to the city’s development.

‘‘There is no vision for the city,’’ says Kalpana Kar, ‘‘and there is a lack of leadership both on the private and public fronts. We need plans that are not questioned and changed with every change of bureaucrat or politician.’’

Kar has first-hand experience of such whimsy. She was once chairperson of the Bangalore Agenda Task Force — an agency disbanded when Dharam Singh (Congress) took over as chief minister in 2004, backed by H.D. Deve Gowda’s Janata Dal (Secular). The previous S.M. Krishna-led Congress government had backed the IT industry heavily, the new regime saw it as less important, articulating a somewhat vague ‘‘pro-rural’’ agenda.

‘‘Our vision for every infrastructure improvement effort keeps changing before the halfway mark,’’ says Kar, ‘‘it’s directionless, the development in Bangalore’’.

She cites the city’s half-a-dozen flyovers to illustrate the blind manner in which Bangalore is being driven: ‘‘The flyovers were built around a plan for an Elevated Light Rail Transit System. Now that the ELRTS plans have been abandoned, the flyovers have themselves become redundant.’’ Yet the one-way rules and traffic snarls the flyovers entailed remain, and now threaten to become permanent scars.

‘‘BANGALORE’S challenge is that it has grown at 11 per cent per annum over the past decade, and infrastructure has obviously not kept pace,’’ says Infosys’ CFO, T. Mohandas Pai. ‘‘The biggest problem is traffic. Industry has suggested a set of shortterm and longterm initiatives, all accepted by the government. These have to be implemented vigorously with the active participation of civil society.’’

There is a sense of unfairness to Bangalore’s neglect. ‘‘The state government derives 70 per cent of its revenues from Bangalore,’’ says Pai, ‘‘it needs to plough back a bit more.’’

HP Globalsoft CEO and Nasscom chairman Som Mittal stresses multi-layered priorities: ‘‘Just because a new international airport is being built in the longterm does not mean the existing airport is neglected in the short term. The pressure on the existing airport is constantly increasing … Similarly, while bigger road projects are on the way, there is need to improve existing roads, footpaths.’’

FOR politicians and other decision-makers alike, much of what is happening is Bangalore is a product of complacency. The IT/BPO boom was seen as too much of a good thing to end. The infrastructure mess, the bad traffic could be surmounted, it was felt. Despite these, American companies would still save enormously by shipping work to Bangalore.

This may be yesterday’s story. At the recent IT.in, Bangalore’s flagship industry event, chief ministers and government delegations landed up to woo Bangalore’s orphans, selling Kochi and Kolkata, Chandigarh and Ahmedabad/Gandhinagar.

They had learnt from Bangalore’s mistakes. They told their potential investors that they had better roads, better infrastructure and better endowed IT parks or dedicated locations ready.

Of course, a Gujarat or a Kerala may not have Bangalore’s formidable mix of technical talent, but when other factors of production begin to migrate, some day, so will the man behind the machine.

After all, this has happened elsewhere. For a century, Detroit was America’s workshop, the automobile capital of the world. Today many of its once buzzing plants are museums, the city is itself is derelict, a hollow urbanscape that is the very prototype of the rust belt.

Of course, America still makes lots of cars and trucks and buses — even if many of the companies are Japanese owned — but the new factories are located elsewhere, in the South, as far away as California, not in Detroit.

Between Deve Gowda and Dharam Singh, they can take Bangalore forward — or drive it to Detroit.