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KOLKATA: The alternative proposals mooted by the state government to keep IT bellwether Infosys in West Bengal have some shortcomings, compared to the benefits offered under the special economic zone (SEZ) scheme, feels experts. However, Infosys has sought time from the government and is expected to reply by the end of this month.

Infosys' project had hit a hurdle in Bengal as the Mamata Banerjee government is, in principle, against SEZs. Recently, the state government put forward three options before Infosys - giving Software Technology Parks (STPI) status to the project, offering land to it in an existing notified SEZ or making the IT giant a co-developer in a notified yet non-functional SEZ.

Experts pointed out that the major hindrance of the STPI scheme is that there is no corporate income tax exemption benefit attached to it. The IT exemption clauses, which were attached to the STPIs, were withdrawn from March 31, 2011. The companies operating under the SEZ banner enjoy exemptions from corporate income tax (CIT). They only pay minimum alternative tax (MAT), which is lower than CIT. Therefore, it is lucrative for any company to operate in an SEZ.

According to sources in the STPI department, "STPI schemes still exist sans the IT exemption clause." Around 70,000 IT companies in the country benefit from this scheme.

"I feel that if Section 10 (a) and 10 (b) of the STPI scheme could be reintroduced, it would greatly benefit not only Infosys in this particular case but also several small and medium IT/BPO companies, who find it very difficult to relocate to a SEZ on cost consideration," Suparno Moitra, regional manager (east), Nasscom, said.

Another difference between STPI and SEZs is the Industrial Dispute Act provision. The SEZs are directly under development commissioner and labour laws are lenient, on the other hand labour laws are stringent in STPIs. Experts pointed out that provision is there that Infosys can become co-developer in any of the existing SEZs. In such a case, Infosys has to seek state government's nod. "But the main problem with this proposal is that all the available SEZs are being developed by private companies. In Odisha, Infosys has become co-developer to an existing SEZ, which was with a state government outfit," an expert added.

Incidentally, Infosys had taken 50-acres in the Rajarhat area, on the northeastern fringes of the city for Rs 1.5 crore per acre for the project. It has made full payment for the land in October last year. It sought for SEZ status. But after it was denied that status, on April 13, the company said: "We have put the Kolkata project on hold for the time being. We shall review and proceed at an appropriate time."