Bengal decides to repeal SEZ Act; Infosys, Wipro in a fix

West Bengal on Wednesday decided to repeal the Special Economic Zone (SEZ) Act, 2003, clearing the road for other incentive schemes the Mamata Banerjee-led government is likely to announce over the next few weeks.

The Act, passed to facilitate "the development, operation, maintenance, management, administration and the regulation of SEZs in West Bengal", had earlier been opposed by Banerjee and her party, the Trinamool Congress (TMC), who had said it was exploitative for workers.

"We have passed the decision to repeal the West Bengal SEZ Act in the cabinet today," said commerce & industries and information technology (IT) minister Partha Chatterjee. After the Act is repealed, the state government would institute a fresh set of incentives, aimed primarily at the IT sector, he said.

While the move would not affect existing SEZ units in the state, it has emphasised the government's stand to not support SEZs.

Infosys and Wipro would be hit the hardest by the move. The country's second- and third-largest IT service providers have their proposed 50-acre campuses in Rajarhat, in the outskirts of

Kolkata.

While the tug-of-war between the two companies (which want SEZ statuses for their respective campuses) and the government (which has steadfastly refused) has been underway for a while, the announcement means an official stamp on the government's stance.

"My immediate understanding is it will not impact existing campuses. It is more of a reiteration of what they (the government) have already communicated to us," said Partha Sarathi Guha Patra, vice-president and head (corporate affairs), Wipro.

The move, Patra said, also left the campus in a state of flux, with neither party having any idea on how to move forward. Wipro had said earlier it was looking for alternative plots of land. It has paid just 25 per cent of the total cost of land till now.

Infosys, on the other hand, has paid the entire Rs 75 crore (Rs 750 million) for the 50 acres. It had earlier said the campus had been put on hold. On Wednesday, Infosys did not respond to a mail by Business Standard.

Partha Chatterjee, however, said every attempt was being made to save the campus, and the government had asked Infosys officials to meet the chief minister on the issue.

Image: Howrah Bridge in Kolkata.