SEZ policy likely to hit innovation

Infosys on Wednesday came down heavily on the special economic zone concept, stating that it is against small companies and this can stifle innovation.

Speaking on the issue while announcing the Q1 results, Mohandas Pai, director-HR, said: "It is not at all conducive and the process for approval is tedious. It takes around 9 to 12 months for a company to get necessary clearances. The SEZ policies are against small companies and the government should work towards helping them. That is where innovation happens."

He added that Infosys has grown into a $2 billion firm starting small and "though Infosys is big today, it has a heart for small companies".

Pai further called for an STPI-like body with SEZ benefits which will continue to support IT companies in India.

"The STPI is one of the best initiatives that the Indian government had taken and that should be adopted in the SEZ regime. The SEZ policies in its present form favours a real estate developer," he highlighted.

Infosys also stated there has been no further development on the 845 acres of land which has been the centre of controversy in Bangalore.

"We have received a letter from the state committee that it has been approved but there is no headway in land acquisition. We are trying and let's see how it develops," Pai noted.

He also stated that the Bangalore real estate market is presently overheated and they will wait a little for it to cool down before making further land acquisitions.

The company during the first quarter of FY'07 incurred a capital expenditure of Rs 193 crore (Rs 1.93 billion). As on June 30, the company had a little over 10 million sq ft of space capable of accommodating 48,656 employees and 4.6 million sq ft under completion, capable of accommodating 16,250 employees.

Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group