IT firms continue to rush for SEZs

Having bagged 70 per cent of the total formal approvals for setting up SEZs, IT and ITeS firms continue to rush for special economic zones and the sector will dominate the agenda for the next Board of Approvals meeting this week.

Of the 15 proposals listed for the BoA meeting on October 19, 11 belong to the IT and ITeS sector, including those from TCS and DLF for their new projects in West Bengal and Uttar Pradesh.

Of the 366 SEZs formally approved by the government so far, 257 are for IT and ITeS, accounting for 70 per cent.

All the big IT firms like Infosys Technologies, TCS, Wipro, HCL and Satyam have joined the SEZ bandwagon, Commerce Ministry data shows.

The SEZ scheme, under which several tax incentives are extended for 15 years, has come in as an alternative to the existing Software Technology Parks of India (STPI) scheme, which gives fiscal sops but will expire in March 2009.

However, some analysts feel that it is not tax incentives alone which are attracting IT and ITeS companies toward SEZs but also the need for global infrastructure, which is easier to build in these zones.

"The SEZ scheme is self-sufficient. Apart from fiscal incentives, there are advantages like ease of operation through single window clearance and creation of infrastructure," Director General of the Export Promotion Council for EOUs and SEZs L B Singhal said.

Besides IT majors, IT and ITeS SEZs are also being established by large real estate companies like DLF and Parsvnath.