No SEZ status: Chandigarh IT park

Driven by the demand of the investors in information technology (IT) and information technology-enabled services (ITES), the administration of Union Territory of Chandigarh has called off the proposal seeking SEZ status for the third phase of the Rajiv Gandhi Information Technology Park at Chandigarh.

According to sources in the department of information technology, Chandigarh, many small and medium players in the field of IT and ITES want space in the IT park but they prefer to get benefits provided by the Software Technology Park of India (STPI) rather than the tax holiday offered in an SEZ.

"The development commissioner for SEZs is based in Noida, whereas STPI has its representatives in Mohali that provides a handholding to the investors," says Sanjay Tyagi, director, STPI, Mohali.

Another advantage of being registered with STPI is that the unit can change its location according to requirements but not if it is notified as an SEZ. Chandigarh, Mohali and Panchkula have more than 125 small and medium software export companies exporting worth $100 million annually.

The lack of clarity of government policy is another factor that refrains the IT players to vie for SEZ status.

Puneet Vatsayan of Mobera Systems says that huge amount of cost is involved in setting up a software centre in terms of land, building, manpower and equipment. A small player cannot move its existing resources to the SEZ location to seek the benefits so this is more viable for the large players.

Mukesh Sharma of QA Infotech added that although the benefits to STPI registered units were likely to lapse in 2009 against the 15 years benefit term for SEZs, the IT companies through different platforms would be able to convince the government to extend it for a longer period.

Of late, eSys Information Technologies also persuaded the IT department of Chandigarh to accommodate them in non-SEZ category.

Whereas, phase one had 123 acres and phase two 270 acres of land, the third phase would have 250 acres of land. Unlike phase one and two, it will not have any commercial establishment.

The administration was supposed to complete the land acquisition by January 2007, but the protests by the locals over the issue of dislocation have slightly deferred the plans of the authorities.