— By Poonam Mondal

Mumbai: The Cauvery water-sharing row has reared its ugly head once every few years, leading to unsavory conflicts between citizens of Karnataka and Tamil Nadu, besides complete shut-down of business activities that caused severe damage to the economy of both the states besides untold hardships to the channel businesses of the IT sector in particular.

Cauvery Riots Take a Toll on Channel Partners

In a recent report, apex industry body Assocham had claimed that the recent closures in and around Bengaluru city resulted in a estimated loss of between Rs.22,000 to Rs.25,000 crore. Considering that a substantial part of the business in the city revolves around IT and textiles, it comes as no surprise that these two segments have copped the worst blows from the ‘Bandhs’.

As many as 25 per cent of the IT-related enterprises, especially the small and medium ones, working with larger distributors and vendors, would have their revenues severely curtailed this month, says Arun Nagaraja of the Karnataka IT Association.

In a statement, the Assocham has criticized the local administration of Bengaluru and Chennai for not controlling the issue. “Water is a basic requirement and an emotional issue, the situation is being exploited by miscreants, scaring away the peace loving workforce which has settled in both Bengaluru and Chennai from all over the country and even abroad,” it said.

What Caused the Bandh

On 5 September, Supreme Court directed the Karnataka government to release 15,000 cusecs of water per day to Tamil Nadu for the next ten days. On 12 September, the Supreme Court modified its order, and instead asked the state administration in Karnataka to release 12,000 cusecs of water on a daily basis till September 20. While Tamil Nadu was happy with the order, residents of the Cauvery delta region saw red, given that the state had experienced deficit rainfall during the monsoons. The unrest spread from Mysore and Mandya and engulfed Bengaluru, all forms of travel.

Losses to the IT and ITES Sector

In a study conducted by Assocham, it was claimed that violence in the state capital and other parts of Karnataka had severely dented the image of Bangalore as the Silicon Valley of India. Besides the notional loss in the realm of Rs. 25,000 crore, they claimed that a lot of goodwill of the state as an attractive investment destination too was eroded.

“The way the violent incidents had spread is demoralizing the business and industrial community, particularly in the capital city of Karnataka. The image that India built around Bengaluru as its ‘Silicon Valley’ is being sullied,” said ASSOCHAM secretary general, D S Rawat.

Arun Nagaraja echoes this sentiment and suggests that “though the bandh has taken turn into political issues so Government needs to take steps for the issues to be politically sorted out. The fact remains that any kind of closure of business adversely impact’s a country’s economy, which means that though we support Karnataka’s stance on the water dispute, we cannot support such closures.”

On the other hand, Balasubramanian R, President, Confed ITA did not disclose on the percentage loss in channel business because of the bandh but echoed similar sentiments as Nagaraja. “We support the cause of Cauvery but are not supporting closures or the agitations that cause such damage.

(Image Source: CNN.Com)