Demands SEZ status or similar benefits to start project.
By R. Chandrasekaran
CHENNAI: After the Tata group, it is the turn of the IT bellwether and India’s second biggest software exporter Infosys to indicate that it has no intention of giving back the 50-acre land to the West Bengal government. However, the company is looking to get tax benefits to start a project there.
The company had paid Rs.750 million for the 50-acres in 2008 when the Communists were ruling West Bengal. The land is situated in Rajarhat, a satellite township, entailing it be called as Special Economic Zone (SEZ) to avail tax benefits.
However, the election of Mamata Banerjee-led Trinamool Congress (TMC) in the State Assembly elections in 2011 has altered the equation. The party has opposed the SEZ status and is also not in favor of granting one. This has forced Infosys to put on hold their proposed project in West Bengal.
Now that more than two years have gone since TMC assumed power, there has not been much of a progress. This resulted in speculation of whether Infosys will hand over the 50-acre land back to the State. However, the company’s executive co-chairman S Gopalakrishnan clarified that, “There are no plans to give up land at this point.”
Tata Motors, which wanted to set up a factory for the manufacture of the much hyped small car ‘Tata Nano’, has been asked by the state government to give back the land allotted to it in Singur in West Bengal since the company has shifted its manufacturing base to Gujarat.
The company had to relocate the project following strong opposition to it and failed to get the committed acreage of land. However, Tata Motors retained the land it had acquired in West Bengal. Both the parties have taken the matter to the court for a solution and the matter is pending before the Supreme Court, which asked the company to spell out its plan.
In the case of Infosys, the government has not asked the company to return the land but opposed the status of SEZ. The company, however, is waiting for the government to give either a SEZ status or at similar benefits for the planned project. This means that the company expects full tax waiver on exports during the first year and half of it in the second year.
To contact the author, email to rchandrasekaran@americanbazaaronline.com