Smart graft – the SEZ way!

“New Draft policy allows IT SEZ developers to exit” reads Deccan Herald. While we are used to a few “political class” dipping their fingers in real estate, more insidious and damaging is when things are done as a matter of “policy decision” – that too in the name of development!!

Google can tell you this: In the not-so-recent-past, there was a STPI (Software Technology Park) and 100% EOUs (Export Oriented Units) got IT and other benefits for bringing in foreign exchange and generating jobs. The recently introduced SEZ replaces the STPI after Mar 2011.

Here is the interesting piece: The law on SEZ provides for 100% IT exemption for SEZ real estate developers (Nice! Someone needs to ask PC, why?). Not only that, the actual forex earning IT firm, to enjoy the benefits previously accorded to EOUs, should now be physically housed inside a SEZ and submit a 5 year lease agreement with the SEZ developer!! As one might expect, renting spaces in SEZ is not exactly cheap.

The current policy  seems to be actually for the benefit of the SEZ real estate developer rather than the businesses that promote exports, bring in foreign exchange and create employment! Add that to the fact that almost all of the new SEZs are owned by the powers that be! If not directly owned, “they have their entire hand not just a finger” as FirstPost put it delicately.

So, in effect the SEZ seems to be an elaborate  scheme to make money off of the forex earnings and that too with 100% income tax exemption!

Welcome to the world of smart graft.