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Where would you do business in India?

By Anand Parthasarathy


BANGALORE APRIL 6. For Indian and foreign entrepreneurs alike, deciding which is the best place in India to do business is a tough decision because of the wildly varying nature of what they offer.

Mumbai is tops for tapping private finance — but its road transport infrastructure is bottom of the heap. On the other hand, Chandigarh's roads are the best and finance too is easy to come by, but its resources by way of professionally qualified personnel are woefully inadequate. Bangalore is the nation's pride when it comes to educated human resources, but try moving across the city, you will move away — very fast. Chennai gets above average marks for its business potential but a report card would say: "Slipping. Could do better."

Delhi tops in communication penetration and its hotels are almost there at the top of the pile; it gets by in most other areas so that when the numbers are added up, it emerges as a "capital proposition" for doing business. Which is why a study commissioned by the Confederation of Indian Industry (CII) concludes that Delhi is the most business-friendly city in India.

The study, "Doing Business in India's Cities", was conducted for the CII by `Indicus Analyticus'. Laveesh Bhandari of Indicus and Bibek Debroy, Director of the Rajiv Gandhi Institute for Contemporary Studies, who are the joint authors, examined 36 cities in India, which according to the 2001 census, have population in excess of 1 million. They also included Goa and Chandigarh.

Of these, 13 cities are "new entrants" — they have joined the "million club" since the previous 1991 census. The study shows that the "usual suspects" — the four metros — are not automatic entrants to a top ten ranking, the second tier metros — Bangalore, Pune, Hyderabad and Ahmedabad — are pushing hard for being considered strong choices for business.

The study also suggests that strong regional centres of education, trade, industry or agricultural catchments such as Asansol, Indore, Vijayawada, Ludhiana and Madurai are the dark horses of the "India Biz" scenario and will have to be considered seriously in future.

The authors assessed each city in six categories including communication, access to private finance, road transport infrastructure, access to professional education resources, good hotel and tourism infrastructure, as well as the overall growth of the city's economy.

They ignored any items that may hinge on government efficiency except as an input into the growth economy of the city. While Delhi emerges as the number one business destination, followed by Mumbai, the surprises lie in the next three claimants — the new boom cities of Chandigarh, Coimbatore and Bangalore. Coimbatore's success is very much self-made. The authors cite its excellent finance and communications resources for a city of its size.

Chennai, whose "laid back" image in recent years has translated into a slippage as a top rung metro destination, comes next as number 6. Ludhiana at the seventh place is another pushy newcomer whose strengths in communication, finance and transport outweigh its poor resources in education and hotels. It is followed by Pune and Hyderabad which are strong in precisely these two areas.

Kochi, the most "happening" place in Kerala and the best connected, just scrapes into the top ten. Kolkata at number 11 has possibly the fastest growth criteria of all cities but is seen as "moderate to moderately poor" in most areas except hotel infrastructure. Ahmedabad is listed at number 17 — not good going for what has been one of India's industrial capitals: the authors cite poor education and personal transport resources "for a city of its size". Interestingly, two other Gujarat cities — Vadodara (13) and Rajkot (15) — are ranked above Ahmedabad and are also seen to be not exploiting their full potential.

The South, in general, fairs poorly and the only other cities in the list are Vijayawada (23), Madurai (27) and Visakhapatnam (28). The ratings were based on data for 2001.

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