Not so long ago,Andhra Pradesh acquired the distinction of having the highest number of SEZs 73 in the country. But the state is now finding it difficult to retain that number,with many companies seeking de-notification of the notified land or a portion of it as they are finding it difficult to develop the SEZs. At least a dozen developers and companies have written to the Andhra Pradesh Industrial Infrastructure Corporation to de-notify full or part of the notified land. If some have cited recession,others have developed cold feet due to the Telangana crisis. They say that things are very uncertain with the Telangana issue blowing hot and cold,and are not willing to take the risk of investing and developing a site for which there may be no takers. They prefer to go to Bangalore,Chennai and Pune rather than Hyderabad, an APIIC official said. While three IT and IT Enabled Services (ITES) SEZs have already been de-notified,others too are lining up. Former Chairman and MD of APIIC B P Acharya says the incentives provided for SEZs,especially for IT and ITES,are not lucrative enough for companies to go ahead with their plans. The Software Technology Parks of India (STPI) has stated that beyond 2011 there would be no special tax benefits for IT and ITES companies whether they are in SEZ or not. On the other hand,there are no disincentives for these companies to invest and develop outside SEZs. So most of the companies which sought land under SEZ or converted their own land into SEZ are not interested anymore, Acharya says. B R Meena,Chairman and Managing Director of APIIC,however,says too much should not be read into a few developers seeking de-notification. Work is going on in all the other SEZs, he says. The three IT and ITES SEZ developers who are seeking de-notification of the notified land had got a nod for their proposals from the Board of Approvals on March 10. Five others have requested a second extension of the validity period for formal approval granted for setting up SEZs. There is no demand for office space in the IT sector at present. The aftermath of recession and the uncertainty caused due to constant bandhs and civil unrest in the wake of the Telangana agitation have forced companies to put off their expansion and development plans, an official said. We have to accede to their demands given the existing situation. After all,whatever business model works for them is good for us. Considering the recessions effects,we cannot take a rigid stand. The developers are offering to pay back duty benefits and export exemptions they have availed under the SEZs, another official said.
