IT as a catalyst

In the last round of the Lok Sabha elections, two IT-savvy state governments of Karnataka and Andhra Pradesh were voted out of power and replaced by avowedly rural and agriculture-oriented administrations.

IT and its concerns were depicted as somewhat elitist and pertaining to cities. But, quite remarkably, the two governments have, in quick time, had to go out of their way to reassure everybody that they remain committed to the growth of IT.

The Karnataka government has promised the IT industry that it will address concerns about Bangalore's infrastructure. What is more, ministers from states where the IT industry is small or non-existent have been making a beeline to Bangalore in an attempt to woo leading IT firms to come and set up shop in their states.

Everybody wants a share of the IT cake because the currently $15-billion IT services industry is likely to more than treble over the next five years and account for twice as much of the national income as it does now.

But more than size it is the quality of jobs and spending associated with the industry that is so attractive. Apart from the fact that every IT job creates seven others in support industries, IT workers are all middle class people whose spending patterns and lifestyles mean additional revenue for all tiers of government ""local (property tax), state (sales tax) and national (excise and income tax).

Additional revenue means state governments can afford to spend more on the rural poor and agricultural development. On the other hand, rapid economic growth is inevitably accompanied by even more rapid urbanisation.

In a scenario where India's towns and cities are dilapidated and bursting at the seams, the IT industry is emerging as a powerful driver of urban renewal and betterment. This is because the IT industry can vote with its feet.

If a city or state government does not get its act together, the industry will get up and leave""or at least not make fresh investment there. This is a great opportunity for states that missed the first IT bus, while offering others a way to get good companies and decent jobs to second-tier cities.

The coming together of IT technology and public-spirited individuals has created enabling conditions for urban renewal. Bangalore, under the leadership of Infosys CEO Nandan Nilekani, has created a new model of public-private partnership through the Bangalore Agenda Task Force (BATF), which has shown the way for a city to pull its resources together and grow sensibly.

Opinion surveys indicate that after four years of concerted action facilitated by BATF, service delivery by the main stakeholders""the municipality, the water and sewerage board and the Bangalore Development Authority"" has improved distinctly. BATF has helped the municipality change its accounting and tax collection methods, leading to a sharp rise in revenues.

A system of periodic meetings has been initiated between the municipality and select NGOs to scrutinise the former's performance""just as company managements hold meetings with analysts and institutional investors.

BATF has also helped take forward an elaborate digital mapping of the city so that future development plans can be grounded on correct information, which can be easily accessed. IT today has many more stakeholders than just the elite.