However, the situation is now changing. While land is at a premium, state subsidies have also declined. Coupled with this setback is the rising challenge of other Indian cities that are making all efforts to attract investment in the technology sector. The challenge is not limited to the larger cities, but also extends to small towns such as Coimbatore and Jaipur. Coimbatore has drawn Cognizant Technology, while Genpact and Progeon have already established base in Jaipur. Even in the proximity of Bangalore, Hyderabad is attracting investments from technology companies. Wipro has recently reached an agreement with the Andhra Pradesh government to buy 100 acres of land in Hyderabad.
The recently held Bangalore IT.in conference has also brought another facet to Bangalore's growing problem: NR Narayana Murthy, chairman of Infosys Technologies, and former Prime Minister HD Deve Gowda were involved in a debate over resource division between the IT and agricultural sectors. It is likely that Deve Gowda, whose party holds coalition power in the state, will incline towards agriculture rather than the development of IT resources.
The shift from Bangalore to other Indian cities is already being felt by Swiss Adecco, the world's largest staffing group. According to the chairman of its Indian arm, at least three investors have selected cities other than Bangalore in the last quarter alone.
It now remains to be seen if the Karnataka go Publishvernment and the IT sector see eye-to-eye, and whether Bangalore is able to reestablish itself as the leading destination in India for IT outsourcing.
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