Hardware, software makers may soon be able to invest in SEZs

Written by Vrishti Beniwal | New Delhi, Jan 6 | Updated: Jan 7 2008, 05:51am hrs
Electronics hardware and software companies may soon be cleared to invest in special economic zones and integrated townships. Plans to build integrated townships of up to 40 sq km in area would keep the cost-competitiveness of the IT sector going even after the tax breaks offered the Software Technology Parks of India (STPI) scheme come to an end in 2009.

Mega-cities plans have been drawn up by the department of information technology and identified as an IT investment region. According to sources, the idea of developing a region jointly for the hardware and software sectors was mooted by the Prime Ministers Office after recommendations from industry bodies, including the Manufacturers Association for Information Technology and Nasscom.

An investment of about Rs 150 crore will be made towards integrated development of such regions. These regions will be developed, keeping in mind the needs of the sectors, as there will be specialisation of zones. These will include science parks as well as accommodation for professionals working in the zones, a source told FE.

Land acquisition and development of a region will be done by states, while infrastructure will be built by developers. A feasibility study and planning will be done by the government.

The STPIs and 100% export-oriented units (EOUs) continue to enjoy tax exemptions for 15 years. But, as the STPI scheme is set to come to end in March 2009, it has worried software exporters operating out of such regions. The proposed IT investment region scheme will come as a respite to IT and ITeS companies as there is no clarity yet on whether the STPI scheme will be extended despite requests from Nasscom, the IT and the commerce ministry.