It is yet another troubled story from the Mamata Banerjee government in West Bengal where she might just fail to attract two IT giants—Infosys and Wipro (second campus).
Adding to its woes is the Union finance ministry, which is mulling more sops for special economic zones (SEZs).
The finance ministry has been indicating that it might relax
SEZ norms to balance India's ever widening current account deficit (CAD). Stung by the blow that falling exports have led to the country's worsening CAD, the government is apparently considering giving a fresh policy boost to SEZs.
Infosys had paid Rs 75 crore for the 50-acre plot in Rajarhat, but is yet to start work as it awaits an SEZ nod from the state government, a demand ruled out by Trinamool Congress supremo and Chief Minister Mamata Banerjee. TMC considers SEZs against the party’s ideology.
Wipro, which already has one campus in Kolkata has an SEZ status, but put its second campus on hold owing to denial of SEZ from the current regime. Each of the two campuses is expected to create employment in excess of 15,000 people at an estimated investment of Rs 700-800 crore.
While during earlier Left Front regime, when Buddhadeb Bhattacharjee was the chief minister, Tata Consultancy Services (TCS), the country’s largest IT service provider, got 40 acres in Rajarhat, and also got an SEZ status. TCS has already started work on site since December 2012 and is expected to create over 16,500 jobs in the next couple of years, once the two phases are complete.
The UPA government is also planning to take all possible steps to shore up exports, which till January have fallen by five%. With imports continuing to rise, the trade deficit in these months has risen eight% over the same period last year, putting pressure on CAD. Promoting SEZs could be one way to relieve that pressure.
When an area is notified as an SEZ, for the first five years, businesses have to pay no tax on income. For the next five years, they have to pay half the tax on income. Even labour laws are different
Infosys co chairman S Gopalakrishnan, who was in the city last week had said here that to be competitive in current market conditions SEZ would be an important criterion as other companies are enjoying the same.
When contacted, Infosys said in a email statement that, "We will schedule a meeting with West Bengal commerce and industry minister Partha Chatterjee at a convenient time to explore the way forward and look for an innovative solution."
However no timeline was fixed for the same.
Gopalakrishnan had also said in Kolkata that “Every government, every political party has its policy, has its platform. We respect that. Having said that it is important that they promote industry. IT industry is also projected to grow at 10% to 11%, so the pressure to expand is not there."
Wipro, owing to silent period ahead of fourth quarter earnings, did not comment to queries sent by Business Standard.
Partha Chatterjee, state industries minister told Business Standard that no further communication has been made from the state on this issue.
Source : smartinvestor.in