ASSOCHAM ECO PULSE

The 7th emerging metro city in India

October 2008

Prepared by: Nusrat Ahmad
Email: nusrat.ahmad@assocham.com; nusratahmad4@gmail.com ASSOCHAM Research Bureau.

Pune to become seventh metro city in India

Pune is set to join the league of six metropolitan cities in India with the development pace catching up fast in providing infrastructure facilities, friendly business environment, education avenues and employment opportunities, according to an Assocham Eco Pulse (AEP) Study.

The rising appeal of Pune is evident from its highest real estate prices and maximum population among the other upcoming cities.

The AEP study on “The 7th emerging metro city in India” analyzed four tier II cities including Pune, Ahmedabad, Lucknow and Chandigarh ranking them on eight parameters necessary for a metro city. They included social infrastructure, infrastructure availability, real estate cost and availability, transportation facility (connectivity), presence of quality educational institutes, employment

opportunity, facility of financial services and business environment.

As per the analysis of the emerging cities based on various parameters, Pune occupied first position overall though it needs to improve on transportation, social infrastructure and financial services.

Ahmedabad was the second most potential city providing good infrastructure and facilities and connectivity. Lucknow was placed with third rank as it needs to pick up on infrastructure, business environment and social infrastructure.

Chandigarh, the smallest city among the four in terms of area size and population was ranked at the fourth position though it was ranked foremost in financial services and business environment.

“There is a grave need for a seventh metro city in our country as most of the present six metro cities in India are facing pressure of rising migrant population, crumbling infrastructure facility and manpower crunch, along with exhausting office and residential space and rising rental cost” said Mr. Sajjan Jindal, President, Assocham. At present, there are six metro cities in India including Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad. Ranking of Pune on various parameters Parameters Business environment Infrastructure availability Real estate cost & availability Educational institutes Employment opportunity Social infrastructure Financial services Transportation facility Overall Rank Pune 1 1 1 1 1 3 3 3 1

Source: Assocham Research Bureau Analysis Social infrastructure of a city is an important parameter as it attracts corporates towards cities with the presence of qualified workforce, quality educational institutions and low cost of living.

Among the four cities, Ahmedabad occupied first rank on the parameter of social infrastructure. The city with literacy rate of 79.89 per cent has high grade institutes like IIM, NID, NIFT, EDII etc. The city of Nawabs, Lucknow with a literacy rate of 83.5 per cent and presence of quality educational institutes including IIM, SGPGIMS etc was placed at second position.

Both Pune and Chandigarh were assigned 3rd positions respectively on the social infrastructure parameter.

Pune has a literacy rate of 80.73 per cent and skilled population, the city is a place of high grade institutes including NIBM, NIC etc. However, 81.9 per cent is the literacy rate in Chandigarh with prominent institutes being Institute of Microbial Technology (IMTECH), Centre for Defence and National Strategic Studies (CDNSS) etc.

The infrastructure parameter rank cities on the basis of sub parameters including number of entertainment avenues, malls and multiplexes along with the presence of star category hotels.

The Queen of Deccan, Pune with maximum number of malls and multiplexes (26) and star category hotels (25) notched the top position. The second rank was occupied by Ahmedabad, with the city having 25 malls & multiplexes and 17 star

category hotels. Chandigarh and Lucknow was placed at 3rd and 4th position respectively.

The favourable location and smoothen process of acquiring land along with the high property prices are few sub parameters of real estate cost and availability that attracts corporate sector to expand their business.

Pune has outpaced the other three cities on the parameter of real estate prices and availability. After Pune, Chandigarh is considered to be the next emerging real estate market. Ahmedabad occupied 3rd rank while Lucknow at the bottom position was considered as most time consuming city in terms of process for acquiring land.

A well connected city plays a vital role in the development of the attached peripherals. The parameter of transportation facility is based on the sub parameters including status of junction station, railway connectivity with rest of the country; availability of international airport and number of national highways passing across the city.

Lucknow railway station is a junction that is well connected to northern and southern part of India. There also exist an international airport and two national highways. The good connectivity led the city to occupy first rank.

Similarly, Ahmedabad also grabbed the first position on the connectivity parameter. Ahmedabad Junction Railway Station is the primary terminus which provides access to different parts of Gujarat as well as the country. The city has an international airport and one national highway that is part of the golden quadrilateral project.

Pune has an international airport and three national highways but absence of railway junction slipped its position to 3rd place in terms of connectivity. Chandigarh with the last rank consists of a non junction railway station, a domestic airport and two national highways touching the city.

Parameter describing educational facilities in the cities takes into account the sub parameters that further help in assigning ranks for each city. The sub parameters include presence of central and state universities, other renowned/ qualified institutions and presence of R& D centres.

Pune, ‘The Oxford of the East’ is reputed for the presence of high class educational institutes. The city is home to nine universities, 80-100 public and private institutes along with six government recognized R& D centres. Out of the four upcoming cities it aptly occupies first rank. The Golden City of East, Lucknow, is a hub of education and research. It consists of six universities, five qualified institutes and nine R& D centres, grabbing second position.

Chandigarh occupied third position. As the city consist of one university and eight government colleges, 13 prominent higher learning institutes and one government recognized R& D centre. Ahmedabad was ranked at the fourth position because of lack of government recognized R&D centres. However, it has three universities and eight reputed institutes.

On the employment parameter, among the four upcoming tier II cities, Pune carved the maximum share of 32.74 per cent in the total jobs tracked by Assocham Placement Parameter for the period January-June 2008. The prominent sectors attracting large number of aspirants include IT,

manufacturing, engineering and academics among others.

Pune is followed by Ahmedabad and Lucknow with a share of 20.67 per cent and 10.21 per cent respectively in generating employment opportunities for the jobseekers. In Ahmedabad, sectors hiring maximum aspirants include manufacturing, IT, engineering and biotechnology. Lucknow appointed

maximum job seekers in the order across the sectors including academics, insurance, banking and IT.

Among the four upcoming cities, Chandigarh with 9.21 per cent was the least employment generating city. The sectors offering maximum employment includes IT, banking, insurance and retail.

The four cities are ranked on the parameter of financial services, taking into account the sub parameters including number of offices of scheduled commercial banks (as on march 2007), density of offices of scheduled commercial banks per population, number of accounts of the scheduled commercial banks per population, presence of brokerage firms, presence of stock exchange, transparency in trading system.

In terms of providing financial services facility to the natives of the city in respect of above parameters, Lucknow occupied first position. The second rank was grabbed by Chandigarh. However, both Pune and Ahmedabad occupied third rank.

Business environment is an essential parameter as it gives an optimistic outlook of the city. The sub parameters include progressive government policies, investment scenario, availability of office space, availability of relatively better infrastructure and rising quality of life that drives demand for products.

On the above parameters, out of the four cities, Pune is considered to be the best city offering optimistic business environment. It is followed by Chandigarh at second position, Ahmedabad and Lucknow notching 3rd and 4th ranks respectively.