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New Delhi, May 5: The share of select tier II cities in the IT-BPO job pie may multiply more than four times, over the next decade, provided the infrastructural, human resource related support and policy initiatives come by, according to a Nasscom-A T Kearney report, released on Monday. The tier-II cities identified by Nasscom include among others, Ahmedabad, Bhubaneswar, Chandigarh, Kochi, may grab 40% (about 3.2 million of the projected 8 million) of the total jobs in IT- BPO sectors in the coming decade, indicating a leap from their existing share of 10% (0.2 million of 2 million), owing to the high real estate cost in the leading destinations, high attrition rates, increased wages and deteriorating infrastructure of the current IT-BPO hotspots comprising the six largest metros and Pune. However, if sustained efforts from the cities are not forthcoming, at the current momentum these non-metro cities will claim 25% (2 million of the projected 8 million) of the total IT-BPO jobs.
The seven prime IT hubs, namely Delhi NCR, Mumbai, Bangalore, Chennai, Kolkata, Hyderabad and Pune currently account for 85% of the IT sector employment and 90% of BPO sector employment. However, they also produce 40% of the total engineering graduates of the country. "The Indian IT-BPO sector has been a frontrunner of economic development in select cities, creative massive employment opportunities and improving the quality of life and amenities like education and healthcare in these cities. We now see the time as being right to spread this development to a new set of locations, provided the requirements of the IT industry can be met," said Ganesh Natarajan, chairman, Nasscom and Global CEO, Zensar Technologies.
The report identifies 15 challenger cities, including Indore, Jaipur, Vadodara, Visakhapatnam, Bhubaneswar etc mainly located in the southern and western part of the country which have the potential to wean jobs away from the traditional IT hubs. Currently the challenger cities offer 30% lower operating costs as against leading IT hubs.
"The success of these centres would depend upon the speed and commitment with which the local city and state governments will work to fill up the gaps identified. We hope the government supports development of these areas by extension of the STPI/SEZ like tax benefits as there are few SEZ's in these locations," said Som Mittal, president, Nasscom. "We intend to discuss the report with state governments," added Natarajan.
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