Bangalore - Economy

Economy

Bengaluru's 52,346 crore (US$9.53 billion) economy (2006–07 Net District Income) makes it one of the major economic centres in India, with the value of city's exports totalling 43,221 crore (US$7.87 billion) in 2004–05. With an economic growth of 10.3%, Bengaluru is the second fastest growing major metropolis in India, and is also the country's fourth largest fast moving consumer goods (FMCG) market. The Forbes magazine considers the city as one of "The Next Decade's Fastest-Growing Cities". With a per capita income of 74,709 (US$1,359.7) in 2006–07, the city is the third largest hub for high net worth individuals and is home to over 10,000 dollar millionaires and about 60,000 super-rich people who have an investable surplus of 4.5 crore (US$1 million) and Rs. 50 lakh (US$ 91,000) respectively.

The headquarters of several public sector undertakings such as Bharat Electronics Limited (BEL), Hindustan Aeronautics Limited (HAL), National Aerospace Laboratories (NAL), Bharat Heavy Electricals Limited (BHEL), Bharat Earth Movers Limited (BEML) and HMT (formerly Hindustan Machine Tools) are located in Bangalore. In June 1972 the Indian Space Research Organisation (ISRO) was established under the Department of Space and headquartered in the city.

Bangalore is called the Silicon Valley of India because of the large number of information technology companies located in the city which contributed 33% of India's Rs. 144,214 crore (US$ 26 billion) IT exports in 2006–07. Bangalore's IT industry is divided into three main clusters — Software Technology Parks of India (STPI); International Tech Park, Bangalore (ITPB); and Electronics City. UB City, the headquarters of the United Breweries Group, is a high-end commercial zone. Infosys and Wipro, India's second and fourth largest software companies are headquartered in Bangalore, as are many of the global SEI-CMM Level 5 Companies.

The growth of IT has presented the city with unique challenges. Ideological clashes sometimes occur between the city's IT moguls, who demand an improvement in the city's infrastructure, and the state government, whose electoral base is primarily the people in rural Karnataka. The encouragement of high-tech industry in Bangalore, for example, has not favoured local employment development, but has, instead, increased land values and forced out small enterprise. The state has also resisted the massive investments required to reverse the rapid decline in intra-city transport which has already begun to drive new and expanding businesses to other centres across India. Bengaluru is a hub for biotechnology related industry in India and in the year 2005, around 47% of the 265 biotechnology companies in India were located here; including Biocon, India's largest biotechnology company.