IT, SMEs & an SEZ

If it all goes as intended, in the next 8 to 10 months Hyderabad could have a place in a special economic zone (SEZ) for small and mid-size IT and IT-enabled services companies, arguably the first such initiative in the country.

The state government has identified the land for this at Kokapet, near Hyderabad, “Initially it will be over five acres on a 119-acre SEZ for IT and IT-enabled services there. It could however be increased later depending on the need and how it shapes up,” says S.K. Joshi, Principal Secretary (IT&C), government of Andhra Pradesh. A private developer, he still cannot name, as the final government nod is still awaited, has been identified and the first structure would be a 5 lakh sq. ft building that could typically house 25 to 30 units.

The cost of land would be the government equity in the project and the private developer, apparently has been selected on some stringent parameters. The rationale for such an SEZ, says Joshi, is simple: “The government is keen to ensure that there is a level-playing field for small & medium enterprises (SMEs); one way of doing this is to allow them to avail of concessions available to those operating out of an SEZ.” What about the users? M. Narsimha Rao, President, Hyderabad Software Exporters Association (HYSEA), feels such a move could help SMEs, as all companies need to create new facilities to get SEZ benefits. Says he: “My view is that since the government provides the land here and a developer sets up some functional facilities, this may be the best way forward for the SMEs as it would result in lower costs to these companies.”

—E. Kumar Sharma