Two firms can share space on a shift basis
The Union commerce ministry has allowed leasing of space within infotech Special Economic Zones (SEZs) on shift basis, making it possible for two companies to operate from a common space within the zones at different times of the day.
In another significant move, the ministry has laid down guidelines for a single-window clearance mechanism for the zones.
The ministry has, in a communiqué, clarified that an IT SEZ developer can now lease the same space to two companies on shift basis. Each of these companies will operate from the same area, but will have some dedicated space to store their equipment like data servers. Detailed guidelines in this regard will be announced soon.
It would now be possible for a software company to operate from an SEZ unit in the day, and for a Business Process Outsourcing unit to operate from the same unit in the night. Experts say that real estate developers building infotech zones, and IT, ITES companies facing the brunt of the economic crisis will benefit from the latest notification.
“Given that the slowdown in the West has adversely affected a large swathe of IT and BPO firms in India, this notification will help companies at the margin achieve break-even at a lower cost. From management of IT infrastructure, there are enough safeguards to facilitate infrastructure sharing with minimal risks,” said Alok Shende, principal analyst, Ascentius Research.
Experts also point that the rentals for such arrangements will be low. “One possible scenario is that the developer builds a plug-and-play facility. The units can come in and set up their servers. Since the developers will have two separate companies for the same space, rentals for such arrangements could be low,” said Abhishek Goenka, partner, BMR Advisors.
Real Estate companies developing IT zones are facing problems as there are few takers for the space offered by them. As a result, the developers are not finding adequate funds to build the zones. In fact, real estate major DLF Ltd recently got clearance from the Board of Approval to scrap five of its notified zones.
Single-window clearance guidelines released
The commerce ministry has released specific guidelines for a single-window mechanism for SEZ related clearances.
At the moment, the mechanism is seen to be operational only at the central government level in the form of the Board of Approval. There are no clear guidelines on how the mechanism will function at the state and SEZ levels, as a result of which developers find it difficult to get some of the clearances. For example, while the BoA clears co-developers for the zones, state governments insist this permission is their prerogative. Contentious issues like these end up delaying the SEZ projects.
The new guidelines have divided the country into seven zones, which will be under the jurisdiction of respective zonal commissioners. Currently, there are seven development commissioners, who would now be given responsibility for each of the zones being created. The state-level meetings of the single-window mechanism will be held once every month, where issues pending from the state government side will be discussed.
Even at the SEZ level, the unit approval committee will have to meet every fortnight to discuss SEZ clearances, which include local permissions involving the state governments.
