Dell's exit rings alarm bells for IT in Punjab
The shutdown of US-based information technology (IT) giant Dell's local unit is a major setback to Punjab deputy chief minister Sukhbir Badal's plans of developing SAS Nagar as an IT hub.chandigarh Updated: May 30, 2014 08:43 IST
The shutdown of US-based information technology (IT) giant Dell's local unit is a major setback to Punjab deputy chief minister Sukhbir Badal's plans of developing SAS Nagar as an IT hub.
On Wednesday, the Dell authorities announced the closure of its unit, leaving about 1,000 employees high and dry. Dell had entered Punjab in March 2005 with the aim of expanding its PC (personal computer) market in India and providing employment to nearly 1,500 employees. Dell was functioning from a building on lease, owned by the Shapoorji Pallonji group, a Mumbai-based business conglomerate with interests in construction, real estate and other sectors.
Highly-placed sources in Dell said the shutdown was part of the company's global rightsizing exercise in view of the fall in PC sales. Also, there were reports of 72% fall in Dell's net income for the 2013-14 fiscal year.
A company statement issued on Thursday said, "Dell has announced the transfer of business of our customer support operations from the SAS Nagar contact centre to our other customer support sites, namely Hyderabad, Gurgaon and Bangalore. We would like our employees to continue their employment with the company and will support them as per the company relocation guidelines. Also, normal operations will continue in the Dell's SAS Nagar unit till November this year, but employees have to decide on shifting to other centres or quitting by June 11."
Meanwhile, IT experts have slammed the state government for inadequate infrastructure and poor implementation of policies regarding information technology.
Punjab IT minister Adesh Partap Singh Kairon did not respond to repeated calls and messages by HT.
Projects failed to take off
In the past six years, many IT companies have stayed away from the state due to non-starter projects and lack of requisite infrastructure. In 2007, the government announced the construction of an IT tower in Sector 67 to house offices. The project was scrapped the next year.
Later, the Punjab Information and Communication Technology Corporation decided to allot six plots of 1-acre each on the same land to IT companies, but these have not been allotted yet. The construction of an IT incubation centre in Industrial Area, Phase 8, proposed in 2007, started this year.
Wipro and Tata Consultancy Services (TCS), which were allotted land in Phase 8-B, returned their plots due to inadequate infrastructure. Phases 7 and 8 of Industrial Area, which can house offices of IT companies, are in a state of neglect, having potholed roads, non-existent public transport and non-functional streetlights.
The Greater Mohali Area Development Authority (GMADA) launched IT City in sectors 82-83-A early this year. In February, the deputy CM handed over letters of land allotment to IT companies, including Infosys, to enable them to set up their units in the IT City.
State govt cites global slowdown
In a statement, a state government spokesman said, "It (closure of the Dell unit) is due to the global slowdown in the PC manufacturing industry. Companies are consolidating because of the I-pad effect. We are confident that once the market picks up, they will re-start operations here. They have no issues with the state government."
All's not well: Cong
Punjab Congress spokesman Sukhpal Khaira said, "It appears that the SAD-BJP govt has misunderstood Modi's slogan 'Achhe din aane wale hain', as indicated by the Dell unit's closure. The IT giant's decision to pull out of Punjab shows that 'all's not well' for the industry in the state. It also deflates the oft-repeated tall claims of the junior Badal of a very bright industrial future."
What they say?
A conducive ecosystem has not been provided by Punjab for making IT-dominated areas as institutional hubs. It's strange that policies are announced but never implemented in time. The delay forces entrepreneurs to set up their units elsewhere.
Partap K Aggarwal, managing director, IDS Infotech Limited, SAS Nagar
It seems that the state government is interested only in grabbing headlines. Good infrastructure is the need of the hour if want to see SAS Nagar come up as an IT hub. We can attract foreign investment only when we have the infrastructure to support the IT industry.
Ajesh Gupta, HR head, Quark City, SAS Nagar
More than 1,400 industrial plots are lying vacant in industrial areas of SAS Nagar. Besides poor infrastructure, our industrialists are facing delays and harassment in getting basic clearances for setting up their units from the departments concerned. Already, the manufacturing sector has migrated from the state.
Nikhil Saraf, president, Mohali Industry and Commerce Association