A city with its foot on the accelerator

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It’s not in the metros. The real story of India’s economic growth--and to a large extent its future--lies today in Tier-I and Tier-II towns. FE starts a ten-part series celebrating the rise and rise of small-town India.

Money is not new to this principal trading town of Madhya Pradesh; it’s the pace of prosperity that is rocking here. I am sitting late in the evening at Geoffrey’s pub at the glittering Treasure Island mall located on Indore’s MG Road in Tukoganj. A couple of young people in their 20s are drinking at another table. Unknowingly, I have logged into change that’s transforming this economically dynamic but socially conservative city. The young man on the next table is a BSc in computer science, Robin Roy, Rob Roy for short. He runs the most popular rock band in Indore—Nicotine. The times they are a’changing around here.

Indore has many sources of wealth. These have witnessed a big multiplier effect from India’s economic growth. It has a huge agro-processing industry and in Ruchi Soya, the biggest Asian player in soya-based products. Says Kailash Shara, chairman of the Rs 5,000-crore firm: “With the retail revolution, there will be better marketing and distribution for the agro-based sector and I see a substantial amount of growth going forward.” The agricultural trading community has also tapped into the commodities index in a big way, and you overhear talk of soya and grain futures the same way one would overhear RIL futures being discussed at an upmarket Mumbai bar.

That Indore is on the move is apparent from the moment you land at the airport. Do not let its old façade deceive you. The whole airport is Wi-Fi enabled! Nearby Pitampur is a township that boasts substantial investments from motor vehicle firms such as the Firodias and Eicher and several auto ancillary firms. Which is an irony because the road from Indore to Pitampur is a nightmare. It’s so bad that if you aren’t riding in a Hummer, you’re all rattled by the time you get there. But most ancillaries are expanding and the hum of progress is in the air.

Later, at IIM Indore, you see some of the brightest minds in India furiously digging into case studies as they approach end-term exams. Says SP Parashar, director: “Indore has many advantages that are intangible. The workforce is diligent and reliable unlike in many parts of India. The climate is pleasant and the trading community well entrenched. Add to that proximity to the bustling Gujarat-Mumbai grid and you have the makings of a growth story. The trigger, of course, is in its property prices.”

Which are turbocharged even by the robust standards of India. Reliance Industries has shaken up the local market by paying a whopping Rs 270 crore for a 37,000-sq m plot in the tony Vijaynagar area. In the auction, it outbid Delhi-based DLF and BPTP who had bid in excess of Rs 170 crore. In the works are a giant mall and a seven-star hotel. Indore seems to have done the impossible: of making the Ambani brothers agree on something—the economic potential of the city. Fast on the heels of RIL's land acquisition was Anil Ambani's announcement of prospective investments to the tune of Rs 50,000 crore in Madhya Pradesh at a glittering global investors meet. The meet also saw a proposal for a world-class signature golf course.