Infy moves major investments out of Bangalore

Infy to take a look at City of Joy
The Times of India

Bangalore/Chennai: If Bangalore is sulking, Kolkata is beckoning Infosys big way. In 15 days, Infosys is despatching a team to explore the possibility of setting up a massive campus at a cost of Rs 500 crore in Kolkata which will house 10,000 developers when completed.

The West Bengal government went at lengths, according to sources, to get Infy chief mentor and chairman N R Narayana Murthy to visit the city and look at the government’s proposal. According to an Infy senior executive, Murthy was impressed by the offer
of the government and the state of infrastructure and decided to look at the destination seriously. Infy’s arch rival Wipro Technologies already operates a large campus in Kolkata.

Following Sunday’s outburst by former prime minister Deve Gowda, industry veterans said incentives and concessions for attracting investments have become not only a national phenomena but a world practice. According to a senior industry executive, the state of Nanjing in China recently offered a hugely sweetened deal to his company: a two-year rent-free premises, five year tax holiday and picking up the salary bill of the employees hired by the company for the first year!

In India, Karnataka pioneered the practice of giving concessions for the IT industry during the J H Patel regime. Industry sources said the land acquisition route through KIADB (Karnataka Industrial Area Development Board) is only one of the options. Apart from Infosys, sources said, others who approached KIADB for land included Wipro, Accenture and Intel. KIADB offers land that are on the outerbounds of the city which many companies do not prefer and go about buying land on their own. They refused to be drawn into a debate on the correlation between land holding and employment generation saying it is not comparable. “The worldwide phenomena is to settle industries in urban sprawls or campuses and there is no direct relation to the value added to the economy,” said sources.

The West Bengal government is rolling a red carpet for Infosys. The IT policy offers a host of attractive concessions including 100% stamp duty waiver on land, reduction in electricity and water tariffs and for mega projects as proposed by Infosys, the government has mandate to extend more sops. In an interview with this newspaper a year ago, WB government officials had said that they have vowed to get the biggest names in the industry into their homeland. IBM, TCS and Wipro are already established there and Infy will only complete their list of marquee investors.

Interestingly, the biggest campus of the company will be located in Chennai. Infy’s mega campus at Mahindra World City on the Grand South Trunk Road in Chennai will house 25,000 developers when completed. The campus is being built at a cost of Rs 1,250 crore. Infy was attracted by Tamil Nadu’s hardsell, superior infrastructure and cool power-packed incentives under the state’s IT policy. Apart from getting the 129 acre land at rates much lower than the market value, the company gets the following: 15 year tax holidays (100% income tax holidays for the first five years, 50% for the next five years and 50% for the subsequent 5 years __ with plough back of 50% of profits into the SEZ Unit).

WOOING AN IT GIANT
WEST BENGAL
100% stamp duty waiver on land Reduction in electricity and water tariffs Mandate with government to give more sops
TAMIL NADU
Land at cheaper rates 15 year tax holiday Exemptions from duties, taxes and local levies Single window clearance
CHINA
Two year rent-free premises Five year tax holiday Meeting salary bills of employees for a year