GIFT is conceptualized as a global Financial and IT Services hub, a first of its kind in India, designed to be at par or above globally benchmarked financial centres such as Shinjuku, Tokyo, Lujiazui, Shanghai, La Defense, Paris, and London Dockyards.
GIFT is conceptualized as a global Financial and IT Services hub, a first of its kind in India, designed to be at par or above globally benchmarked financial centres such as Shinjuku, Tokyo, Lujiazui, Shanghai, La Defense, Paris, and London Dockyards. In an interaction with FE Online’s Sakshi Prashar, Ajay Pandey, MD & Group CEO, GIFT City explains objectives and gains stemming from this massive project. Here are the excerpts:
Que. What is the objective of Gift city?
Ans. GIFT is planned as a Financial & IT/ITeS Central Business District (CBD) between Ahmedabad and Gandhinagar as a greenfield project. GIFT shall be a part of the future urban complex of Ahmedabad & Gandhinagar. More particularly, state-of-the-art connectivity, infrastructure and transportation access have been integrated into the design of the city. GIFT Master Plan reflects a sophisticated planning approach that integrates the intended program into the existing context of both the site and the region. GIFT is expected to become a contemporary model in India, advancing the ideas of sustainability and ecology. The project regenerates the area as high quality, mixed-use district of residential, commercial, social and open space facilities that optimize land with work to work concept.
Que. GIFT City has an estimated budget cost of Rs 70,000 crore. Any expected date of completion?
Ans. The development in GIFT City will be done in a phased manner – in three parts. In its phase-1 developmentGIFT City has made allotment of around 14 million sq ft of of which few building are ready and few of other are under construction. GIFT City’s Phase-1 development has seen allotments of over 14 million square feet of built up area (BUA) in the SEZ and Non-SEZ area for development of office towers, residential apartments and social facilities to be developed at an estimated total investment of around Rs 9600 crore.
In the second phase, GIFT City plans to allot 22 million square feet for development of commercial, residential and other social infrastructure. Currently in phase 2 GIFT has allotted around 1.4 million sq ft for development.The total investment till date is around 10,500 crores including phase 1 and phase 2 development.GIFT city has invested around 1000 crores till date in project development including creating various next class infrastructures in the city.
Que. How many jobs has the project created and what are the future employment creation opportunities?
Ans. GIFT City is operational as various financial institutions and IT/ITeS companies are operating from the city. Currently around 3500 people are working in GIFT City and it is expected that by 2018 the employment will reach around 30,000 people.
When GIFT City will be fully operational it will create 5 lakh direct and equal numbers of indirect jobs.
Que: Recently, Maharashtra CM Devendra Fadnavis said GIFT/IFSC can co-exist, what sort of competition do you see? According to you how can these two work together.
Ans. The Gift City MD denied to answer the question
Que.GIFT City is an SEZ. What tax incentives are being offered to lure global banks & institutions to the smart city?
Ans. Actually, GIFT City has a designated SEZ area within it premises that houses India’s first International Financial Services Center (IFSC).
Global banks and institutions operating in GIFT will receive several tax benefits as announced by the Government of India in the recent and previous budget sessions. These will include exemption from dividend distribution tax, securities transaction tax, long-term capital gain tax and commodity transaction tax. In addition, for the companies located in IFSC, Minimum Alternate Tax (MAT) is reduced to 9 %. This reduction in MAT, which currently is at 18.5%, provides a competitive tax regime to IFSC at GIFT-City. Also, recent announcement of IT/ITeS policy of Gujarat and waiver of stamp duty on share broking transactions in GIFT City from Government of Gujarat will further boost the development of India’s first IFSC at GIFT City.
Que. How will the GIFT City become a benchmark/ or an engine of growth for the Smart City project?
Ans. As India’s first operational ‘Smart City,’ the project encompasses top notch infrastructure facilities such as District Cooling System (DCS), Underground Utility Tunnel, Automated Waste Collection etc.; many of which are being introduced in India for the first time. Companies and their employees working at here will be able to avail world-class infrastructure facilities with a ‘walk-to-work’ convenience being made available with commercial and residential complexes being set up with GIFT City itself.
Que. Which companies have been allotted space for construction and who have committed to set up operations at GIFT City? What advantages does GIFT offer to them?
Ans. In terms of developing their own buildings, GIFT has allotted space to institutions like SBI, LIC, BSE Broker’s Forum and Reliance Capital.
Additionally, leading developers like Hiranandani, Prestige Group, Brigade Group, World Trade Centre etc. are also developing various facilities in GIFT City.
Around ten banks have been allotted space for their IBUs in the current phase in GIFT IFSC. Out of these, Federal Bank, Yes Bank, ICICI Bank, IDBI Bank, and Kotak Mahindra Bank have been operational. In the coming weeks we will see other banks will be starting their operations in GIFT IFSC.In addition, many well-known IT/ITeS companies, both domestic and global, have set up their units at GIFT City, these include MNC giants like Oracle, Maxim Integrated and many more.
Que. What are the challenges that you faced in the development of GIFT City? Are there any lessons that you would like to share with other proposed smart cities?
Ans. As you are aware GIFT City is a unique development and one of its first kinds of project. Therefore starting from planning to implementation was a lesson for all. You will agree that creating next call infrastrucre has its own challenges starting from technology, funding, implementation etc.
We are happy to share that we have overcome those initial challenges and now you can see various next class infrastructure are operations at GIFT City.
Que. What makes GIFT city a global Financial and IT Services Hub in the lines of Global Financial Centres such as Singapore, Paris, Shanghai.
Ans. India is conveniently located to serve all time zones and has long-standing trading and cultural ties with markets around the world. India also enjoys significantly lower operational and wage costs as compared to centers like Singapore, Dubai, London and New York. It has a large pool of individuals with professional and technical skills owing to its demographic dividend. Moreover, it produces the finest brains in finance. IFSCs at London, Dubai, New York, and Singapore incidentally have a large number of Indians managing complex transactions and leading financial innovations. India has a vast hinterland economy, which small city-based financial centres like Singapore or Dubai lack.
Que. What is the role of international players in the project?
Ans. Given that GIFT houses India’s first IFSC, presence of International players in the city lends to its credibility and repute as a global financial hub.GIFT City has signed MoU’s with below mentioned institutions for setting up an International Exchange in GIFT City:
1. Dubai Multi Commodity Centre (DMCC)
2. National Stock Exchange (NSE)
3. Bombay Stock Exchange (BSE)
4. Multi Commodity Exchange (MCX)
Recently GIFT City has signed Memorandum of Agreement (MoA) with Singapore Arbitration Centre (SIAC) to setup their representative office in GIFT City.In terms of IT companies Oracle and Maxim Integrated has already started its operational and have plans to expand the same in GIFT City.
Que: Give us an insight of the pact GIFT has recently inked with Singapore Arbitration Centre. How according to you the project will benefit from it.
Ans: We are delighted to have SIAC set up a representative office in the GIFT IFSC. Any successful IFSC requires an efficient dispute resolution mechanism, and in this regard, SIAC is the choice partner for IFSC-GIFT: Singapore is a reputable seat of arbitration; SIAC, and the SIAC Rules, are already widely used by Indian companies, as well as international companies investing in India, to resolve their disputes. Through this collaboration, the Indian and international businesses in the IFSC-GIFT will be able to choose SIAC as their preferred mode of dispute resolution.”