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Some Indian cities are enjoying a boom

Published by The Straits Times, Singapore on 2004-09-21

CHENNAI (India) - This densely packed southern city, long known as a centre for classical Carnatic music and the Bharata Natyam dance, is observing the 350th anniversary of its founding by the British. These days, however, its residents also wonder ruefully how much more population growth Chennai can take without irreparably affecting its municipal services.

That doesn't worry local administrators. They feel, in fact, that Chennai, the capital of Tamil Nadu state, has lots of room to grow in sectors such as technology and automobile production. And so, to promote such growth, the state government has been dispatching emissaries all over the world - but particularly to the wealthy industrialised countries - to persuade investors to come here.

Tamil Nadu faces competition from its neighbours. Economic growth in this state of more than 64 million people mirrors progress in other southern states like Kerala, Karnataka and Andhra Pradesh, all of which have benefited from the technology boom of recent years. These states, too, have delegations constantly on the move overseas. In fact, some of them have even opened permanent trade offices in cities such as New York and London.

The four southern states - Andhra Pradesh, Karnataka, Kerala and Tamil Nadu - have each registered annual growth rates of more than 10 percent, substantially more than the national average of seven percent. International brand names such as the Ford Motor Company, Microsoft, Oracle, IBM, Sony and others have set up shop or production facilities in these states. Tamil Nadu, in fact, is rapidly developing a reputation for being the automobile-manufacturing hub of India.

Similarly, the industrial state of Maharashtra on India's west coast is doing well economically. So is Punjab, long considered the granary of India. Now, according to Mr Rana Gurmit Singh Sodhi, Political Secretary to the state's Chief Minister, Mr Amarinder Singh, Punjab's cities such as the capital of Chandigarh are rapidly developing technology centres - and thus attracting new waves of talented professionals from other states.

India's economically progressive states are so confident of sustaining their economic development that they have opened trade offices in Southeast Asian countries as well, to woo foreign investors. They have opened new universities that specialise in the curricula of contemporary globalisation - computer science and business administration. They have expanded call centres that cater to multinational companies, creating additional job opportunities not only for locals but also Indians from other states - particularly the economically backward areas of the so-called "cow belt" of Rajasthan, Bihar, Madhya Pradesh and Uttar Pradesh.

"I'm surprised at the number of Indian professionals settled overseas who've expressed interest in returning to their homeland," Mr Jagdish Tytler, India's Minister for Overseas Indians Affairs, told The Straits Times.

They are heading toward not only the traditional centres of technological excellence such as Bangalore in Karnataka state and Hyderabad in Andhra Pradesh, but also cities that heretofore did not have major technology campuses such as Kolkata, the capital of West Bengal, Ahmedabad in Gujarat state, and Pune, a small city south of Mumbai. Pune, in fact, used to be long considered a small resort community; like other towns that have burgeoned into cities, its population grew exponential as industries like Bajaj Automobiles and others moved in because of low cost and a highly educated population.
To cope with indigenous population growth but also to become more attractive for foreign investment, cities like New Delhi are undertaking formidable infrastructure construction. Delhi's Chief Minister, Mrs Sheila Dikshit, has embarked on a program of relieving traffic congestion by building dozens of flyovers. A new underground commuter railway system, called the Delhi Metro, is also being built. Delhi's infrastructure master plan isn't expected to be completed for another five years - years during which most city residents expect to see more chaotic traffic.
Bad traffic notwithstanding in cities like New Delhi and Mumbai, the migrants - both domestic and from overseas - keep coming. This has led to a dramatic escalation in real estate prices, and in rentals.
In Mumbai, for instance, a two-bedroom apartment in the coveted southern section of the city cannot be bought for less than the equivalent of US$1 million. Renting a similar apartment would cost more than US$2,000 a month. In New Delhi, rentals are lower - but not by much. An American business executive recently rented a three-bedroom apartment in the suburb of Dwarka for the equivalent of US$1,800 a month.
He also had to pay what Indians call "key money." Plainly put, this is a bribe to the landlord, usually handled by a real-estate broker. The businessman was also required to pay three months' rent as a security deposit, and another three months' rent in advance. Fortunately for him, his company picked up the tab.

Pranay Gupte,
Senior Writer and Global-Affairs Columnist

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