India's West Bengal in Microsoft tie-up

CALCUTTA, India -- India's communist-ruled eastern state of West Bengal plans to tie up with Microsoft in an electronic governance project.

The Indian province plans to establish a statewide computer network connecting the government secretariat and districts' headquarters to facilitate more transparent and effective governance with the software giant's help.

"We will sign a memorandum of understanding with Microsoft for our e-governance plans on August 16," said Manab Mukherjee, West Bengal's Information Technology minister.

Wooing IT investment

A senior official at the West Bengal Electronics Industry Development Corp (Webel) said the deal with Microsoft would help the state woo investments in the information technology sector.

"Big guns like International Business Machines (IBM) and PricewaterhouseCoopers are already here and, with Microsoft's planned entry, the state's image as a potential hotspot for IT will get a boost," the Webel official, who did not wish to be named, said.

West Bengal is trying to attract IT investments, saying it offers lower rental rates and better quality power supply than neighboring provinces.

But it lags behind the southern states of Karnataka, where India's IT hub of Bangalore is located, and Andhra Pradesh, which is headed by India's most technology-savvy chief minister, Chandrababu Naidu.

About 160 IT firms, employing over 11,000 people, currently operate in the electronics complex in Calcutta, the state capital. These include Computer Associates and free Internet service provider Caltiger.com.

IBM tied up with West Bengal for an IT education project in February and last year Indian software giant Wipro was allotted land to set up a development center in Calcutta.

Reuters contributed to this report.