 "IFSC at Gift City to be operationalised in a year")
India might soon be competing with the likes of Dubai, Singapore and Malaysia with the International Finance Service Centre (IFSC), coming up at Gujarat International Finance Tec-City near Ahmedabad in a year’s time.
Ramakant Jha, managing director and chief executive officer of GIFT Company, which is executing the Gift City and the IFSC project, said: “The government has taken up the IFSC project as priority and we’re planning to operationalise the project in a year’s time. Actual business and trading international exchanges should start in one year.”
The GIFT Company is constructing ground-plus-two-floor structures where exchanges, banks and other intermediaries and service providers can start their business in a year’s time. Larger towers will take about three years to be ready.
While initial business is expected to be on a smaller scale, when business activities grow and larger buildings will be ready to be occupied, the smaller structures would be demolished.
India is following the Malaysia model for IFSC, because the Malaysian currency, ringgit, is not fully convertible like the Indian rupee. For IFSC, there will be no foreign exchange controls as the Foreign Exchange Management Act will not apply at GIFT. Forex restrictions will, however, apply to Indian residents.
Two key decisions, about applicable tax rate and legal mechanism, are still awaited from the government regarding IFSC. Jha said: “Other three Asian IFSCs are matured, while ours is a greenfield project and, hence, tax rates should be competitive.” Dubai has no tax, while Malaysia has three per cent and Singapore has 10 per cent. He has recommended to the government that India’s tax rate should be competitive with respect to these regions.
Also, the judiciary should be transparent and fast in justice delivery. Arbitration is time-bound in places like Singapore, where a decision has to be taken in three months. India should also have a transparent and faster legal mechanism. Jha is hopeful these decisions will come sooner.
Finance Minister Arun Jaitley might indicate some of these on April 10 while unveiling financial regulations.
IFSC will soon be notified as a finance special economic zone, or SEZ, according to Jha. Intermediaries will have to initiate approval procedures; GIFT Company will help get approvals faster. All approvals are expected to be issued in six months. Business activities could begin in nucleus offices at IFSC, which can be expanded in future as business expands.
IFSC is coming up in 261 acres with 28 million sq ft construction space. Two developers have already been given development rights for construction. One is the Mumbai-headquartered Hiranandanis and the other is Bengaluru-based Brigade Group. Other development rights will also be issued in due course. All world-class infrastructure coming up at Gift will also come up at IFSC.
The infrastructure includes a huge tunnel for passing cables, district cooling system, being introduced for the first time in India on a commercial basis for providing chilled water to all structures in the Centre and several multi-level car parking facilities. When fully operational, IFSC will provide “500,000 direct and an equal number of indirect jobs”, Jha said.
Ramakant Jha, managing director and chief executive officer of GIFT Company, which is executing the Gift City and the IFSC project, said: “The government has taken up the IFSC project as priority and we’re planning to operationalise the project in a year’s time. Actual business and trading international exchanges should start in one year.”
| IN THE GIFT-BOX |
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The GIFT Company is constructing ground-plus-two-floor structures where exchanges, banks and other intermediaries and service providers can start their business in a year’s time. Larger towers will take about three years to be ready.
While initial business is expected to be on a smaller scale, when business activities grow and larger buildings will be ready to be occupied, the smaller structures would be demolished.
India is following the Malaysia model for IFSC, because the Malaysian currency, ringgit, is not fully convertible like the Indian rupee. For IFSC, there will be no foreign exchange controls as the Foreign Exchange Management Act will not apply at GIFT. Forex restrictions will, however, apply to Indian residents.
Two key decisions, about applicable tax rate and legal mechanism, are still awaited from the government regarding IFSC. Jha said: “Other three Asian IFSCs are matured, while ours is a greenfield project and, hence, tax rates should be competitive.” Dubai has no tax, while Malaysia has three per cent and Singapore has 10 per cent. He has recommended to the government that India’s tax rate should be competitive with respect to these regions.
Also, the judiciary should be transparent and fast in justice delivery. Arbitration is time-bound in places like Singapore, where a decision has to be taken in three months. India should also have a transparent and faster legal mechanism. Jha is hopeful these decisions will come sooner.
Finance Minister Arun Jaitley might indicate some of these on April 10 while unveiling financial regulations.
IFSC will soon be notified as a finance special economic zone, or SEZ, according to Jha. Intermediaries will have to initiate approval procedures; GIFT Company will help get approvals faster. All approvals are expected to be issued in six months. Business activities could begin in nucleus offices at IFSC, which can be expanded in future as business expands.
IFSC is coming up in 261 acres with 28 million sq ft construction space. Two developers have already been given development rights for construction. One is the Mumbai-headquartered Hiranandanis and the other is Bengaluru-based Brigade Group. Other development rights will also be issued in due course. All world-class infrastructure coming up at Gift will also come up at IFSC.
The infrastructure includes a huge tunnel for passing cables, district cooling system, being introduced for the first time in India on a commercial basis for providing chilled water to all structures in the Centre and several multi-level car parking facilities. When fully operational, IFSC will provide “500,000 direct and an equal number of indirect jobs”, Jha said.