Instead of SEZs, Bengal to roll out attractive incentives for IT firms
The West Bengal government is rolling out several schemes instead of Special Economic Zone (SEZs) status to woo information technology (IT) firms to do business in the state.
Some of the big ticket investors in the IT sector have put some projects in Bengal on hold by insisting on their long standing demand for SEZs. As a solution, the state has arranged for alternative plans like waiver in tax and other lucrative benefits.
SEZ units generally offer tax rebates, fiscal incentives and lands at subsidised rates which are applicable across the nation. The implementation of the first draft SEZ policy took place in 2000 and the first policy statement of Indian SEZ was later amended.
The new SEZ policy, framed by the Centre, refers to acquisition of large tracts of land but Mamata Banerjee-led government is opposed to forcible land acquisition.
A source in the IT department said that the state will offer 50 per cent waiver of property tax for IT companies in Bengal. The benefit will be provided to them during the first 12 years of starting their operation in the state. This would immensely benefit IT firms.
Along with this, the IT firms will also get a higher floor to area (FAR) ratio for their offices. The government recently came up with new FAR rules which opens opportunities for companies to develop more open space, car parking, greenery and landscaping. As per the new rules, FAR will be calculated on the entire project area and not on basic urban infrastructure unlike the previous norm.
“The government will see the possibility of local skilled and unskilled employment generation to give away such benefits. Although the FAR rules were only applicable to township projects till now, IT companies may also avail it if the government deems it suitable,” said an IT department source.
The state’s oldest IT hub in Salt Lake’s Sector V is almost full and so, New Town which lies adjacent to Sector V has become the new destination for IT firms. Meanwhile, the state has developed several IT parks at – Haldia, Siliguri and Durgapur.
The state government is yet to decide whether to include benefits under state levies like stamp duty, sales tax and entry tax – as part of their alternative schemes.
“Companies like Infosys and Wipro could be considered to receive such benefits because of their capability to generate large-scale employment,” the source added.
Many Indian IT companies are obsessed with SEZ status as it comes with numerous perks. It provides the companies with a 10-year tax holiday, exemption from duties on all imports for project development, waiver of Value Added Tax on domestic sourcing of capital goods for project development, no foreign ownership restrictions in developing zone infrastructure, freedom to develop township into SEZ with residential areas, markets, play grounds, clubs and recreation hubs, in-house customs clearance facilities and many others.
Wipro and Cognizant Technology already have their SEZ campus in Sector V and Bantala respectively. Though Infosys was provided with 50 acre of land in 2009, but its ambitious project never took off due to SEZ status-related issues.