Bangalore Did Not Deserve the SemIndia Project

There has been much debate about the decision of SemIndia preferring Hyderabad to Bangalore for setting up a mammoth US $3 billion chip manufacturing plant. While many may feel that with the presence of a large skilled talent pool and an established IT-Electronics industry, SemIndia’s interests could perhaps have been better served by being in Bangalore, anybody who’s been witnessing the state of affairs in the “IT City” over the past two years (2004-06) will tell you that such a thing was only waiting to happen.

An unlikely political coalition in the wake of a hung assembly after the 2004 elections saw the Congress (I) and the Janata Dal (S) team up with no apparent agenda other than to keep the emerging Bharatiya Janata Party (BJP) at bay. The contradictions surfaced immediately, with no portfolios being distributed for weeks at end. With no ministers inducted into the cabinet, work in all government departments simply clogged up. Day to day administration came to a complete halt, and the ordinary citizen had no one to blame but herself.

Chaotic traffic in Bangalore

Traffic in Bangalore is bursting at the seams and driving through the city for most part of the day is a harrowing experience, no less.

Former Prime Minister and state JD (S) kingpin H D Deve Gowda showed who was in charge from day one. Having managed to get his good friend from the Congress (I), the admissive and mild Dharam Singh, installed as Chief Minister, Gowda comfortably set about implementing his own agenda, which was basically to reverse all the decisions that had been taken by his predecessor and bete noire, former CM S M Krishna. He opposed every initiative the previous Government had taken, right from the policy of attracting IT industries to the various infrastructure works in the fray, such as the Bangalore-Mysore Infrastructure Corridor (BMIC), the Bangalore Metro Rail project and the Bangalore International Airport project, to name a few. Even the hugely successful public-private partnership model for the development of Bangalore, the Bangalore Agenda Task Force (BATF), attracted his ire for being urban-centric.



Ordinary citizens like us watched helplessly as Gowda marched on like a rampaging pachyderm, and Bangalore slowly went from bad to worse as civic works collapsed entirely. Incomplete flyovers, potholed roads and chaotic traffic became the hallmark of a city that once prided itself on being called the “Garden City of India” and a “pensioner’s paradise.” When the city’s IT czars like the noble N R Narayana Murthy, Azim Premji and Kiran Mazumdar Shaw took up cudgels on behalf of the people, they were branded as a pampered lot and chided for complaining despite being at the receiving end of several Government benefits and exemptions.

Coming back to the issue of SemIndia, it is obvious that the decision must have been largely influenced by this dubious recent history of Karnataka (and Bangalore). In contrast, Andhra Pradesh has been setting an enviable example by its induction of IT into nearly every sphere of governance. Former Andhra CM N Chandrababu Naidu started the trend and the present incumbent, Y S Rajasekhara Reddy, has continued this. Today, most people visiting Hyderabad return with the opinion that it is invariably a better managed and better planned city as compared to Bangalore. Some years back, the talk of Hyderabad upstaging Bangalore at its own game was treated as a light-hearted comment. Not so anymore, perhaps.

SemIndia CEO Vinod K. Agarwal

SemIndia CEO Vinod K. Agarwal delivering a speech at a picnic organized by my company, Xalted Networks. Xalted CEO Pratap Kondamoori is an advisor to the SemIndia Board of Directors.

Logistically too, it makes sense to choose Hyderabad over Bangalore. Chip fabrication is not as skill-intensive an industry as software. Unskilled labour is available in plenty in Hyderabad and around. Those apart, large tracts of land and reliable supplies of water and electricity have been promised by the local Government. Land and labour costs are also cheaper as compared to Bangalore.



Perhaps this was just the jolt Karnataka needed to wake up from its stupor. The cracks have been apparent for quite some time. Infosys and Siemens have already announced that they have no further expansion plans in Bangalore. And already, the signs of change are visible with the change of guard in the state. The young new CM, H D Kumaraswamy (ironically Gowda’s son), is going all out to redress the concerns of industry and the citizens. His first orders as CM have been to restore the developmental works put on hold by his father.

The young leader has been making all the right noises. In any case, things can’t get any worse than they have been for the past year. Let’s hope the son can achieve what his father, and indeed, several eminent politicians before him, could not – bring about a genuine change in the political ways of the state.


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1 Comment

  1. AnonymousAnonymous08-11-2006

    Hey Man …I read your blog , I am slight in disagreement with your view that FAB doesnot require skilled labor, sorry to say then you have no idea what is semiconductor fabrication is. Its an highly skilled job where you need atleast MS students with extensive research and condensed matter physics knowledge. So please remove this misconception. I am saying this as I myself is a process engineer in R&D team in world most advanced chip making company.

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