Karnik comes down on SEZ policy

'Minimum requirement of 25 acres detrimental to the growth of small IT firms'.

A day after Infosys came down heavily on the special economic zone (SEZ) concept, Nasscom President Kiran Karnik said it would be detrimental to the growth of smaller IT and ITES companies.

He said the minimum requirement of 25 acres for an SEZ would affect smaller companies.

Addressing a BPO seminar organised by TiE and Nasscom, Kiran Karnik said the policy favoured the big companies and did not provide a level playing field. "The industry survives on start-ups," he explained.

Later speaking to mediapersons, Karnik said Nasscom's argument was that the STPI (software technology parks of India) scheme had worked and should be allowed to continue.

The STPI would end on March 31, 2009. He explained that while the STPI scheme was a decentralised model, the SEZ scheme was centralised and growth through SEZs would be concentrated, like in China.

Karnik further pointed out that according to scheme, there would be only 150 SEZs, thereby creating a licence raj of sorts.

"For a population of 1.1 billion, land is a problem," he said. The only stipulation in the SEZ scheme is land and it should actually encourage exports and employment, said Karnik.

Commenting further, "Nasscom has already taken up the issue with the ministry of commerce and industry. "We are hoping they will do something," said Karnik.

HCL Technologies CEO N Ranjit said 25 acres would not be available in the city and hence the company would have to move to the outskirts.

"Around 40 per cent of the employees are women and it is difficult for them to commute," he said.