Bengalooru Bangalore-d

These are not the rosiest of times for IT companies. Their profits are being squeezed by a rising rupee, they face high rates of employee attrition, they have come in for sharp criticism from the Health minister for the working conditions to which BPO employees are subjected and their stocks have lost some of their sizzle.

Now, they are coming for in flak from the city with which they have come to be associated and which they claim to have placed on the international map, Bengalooru. Outlook magazine has an interesting story by Sugata Srinivasulu on how IT companies and their employees are being viewed with disfavour by many in Bangalore.

The world's most celebrated IT city is now considering that privilege to be a curse. Infosys and Wipro are no longer considered gateways to heaven, but more as roads to hell. When Infosys's Narayana Murthy was charged with showing 'disrespect' to the national anthem, there was a glaring absence of sympathy for the IT czar in the public domain, whereas earlier there would have been a tidal wave of support. Likewise for Wipro, when it was charged by a government panel of encroaching upon Bellandur lake to build its guest house. Another time, when the state government proposed to set up an education training and management institute with the Azim Premji Foundation, there was a letter campaign against it. There is now a perceptible change in the way the public in Bangalore looks at Murthy and Premji, the two most revered symbols of its IT industry—that they're no different from other businessmen who merely make profits for their company and their shareholders.

Well, well. What precisely are the grievances that people in Bangalore have against IT folk? The litany of complaints includes: rising property prices thanks to the IT employees' purchasing power, grabbing of prime land by IT companies, the bar and disco culture and IT employees being preferred in the bridal market.

There is a clear divide between other middle-class professionals, including the many in the public sector, and the IT employees. Those on the former side resent the rise to prominence of the latter.

The feature set me thinking. There are other professions that pay even more- the financial services sector, for instance. How come we do not see a similar resentment towards investment bankers and private equity people in Mumbai? I guess that's because partly the city is not yet identified with these professionals, they are not that numerous and, besides, in Mumbai, there are other sectors that absorb people and pay well.

IT dominates Bengalooru in a way in which other sectors do not dominate any metropolis and, also, the disparity between a dominant sector and other sectors in any city is not as great. If the proposed International Finance City materialises in Mumbai, we can expect an even greater backlash than what we are seeing in Bengalooru today.

A second reason could be that IT does not have the same linkages with the domestic economy. Finance professionals create prosperity in companies they take public, the stock market benefits thousands of shareholders. IT is seen to benefit only the people in the sector and nobody else. True, as Subroto Bagchi points out, IT creates benefits (such as declining telecom costs) but these effects are indirect and not as visible, hence the resentment.

Thirdly, to some extent, the prosperity of IT and its employees is seen as coming at the expense of the economy. IT companies have benefited from huge allotments of land at concessional prices, they benefited from an undervalued rupee for over a decade and they benefited from tax concessions as well. The charities made by some IT personalities are seen as poor compensation for the benefits earned.

So, what do we do? Throw IT out? Not at all. Can greater philanthropy help? To some extent, maybe- for instance, a classy university run at affordable prices on IT endownments might help assuage popular sentiment.

But the biggest corrective, I reckon, will come from the very economic environment that created IT's prosperity- no more concessional land, a decline in profitability from a rising rupee and its attendant costs (including layoffs in the IT sector) and a greater focus on the domestic economy on the part of IT firms in the face of a rising rupee.