Infosys to go ahead with Kolkata centre
Infosys announced on Monday commencement of works for a software development centre in Kolkata, even without it getting the special economic zone (SEZ) status, a key demand that delayed the project.
The Bengaluru-based IT major will initially invest ~1 billion without any kind of tax sops from the state government. West Bengal had allotted 50 acres of land in Rajarhat township near Kolkata to Infosys in 2010. Despite paying ~750 million to acquire the land, Infosys didn't start construction due to differences over taxation issues.
After Mamata Banerjee took oath chief minister in 2011, the project was put on the backburner as her party was opposed to the idea of turning the centre into a SEZ.
“Infosys has decided to set up the new software development centre without SEZ status," it said in a statement in response to a query by Business Standard. “The centre is being developed to address the growing business requirements. Ease of doing business, availability of highly skilled manpower and best-in-class infrastructure superseded the tax benefits extended to SEZ.”
The centre, the company said in a separate release, would house 1,000 engineers to begin with. The first phase will come up on 525,000 square feet and is likely to be completed in 15 months from the date of obtaining all regulatory clearances.
"I congratulate the West Bengal government on laying the foundation stone for the Bengal Silicon Valley Hub, here in Kolkata. On this special occasion, I would like to thank Chief Minister Mamata Banerjee for giving Infosys a unique opportunity to be a part of this prestigious project, and further strengthen our presence across the country," said Salil Parekh, CEO and MD at Infosys.
"There are three factors that drove our decision to build up this centre. Firstly, human resource availability is pretty good and as a people's firm, we see that as a definite advantage. Second, attrition level in these centres are low. And thirdly, the government is very supportive with very friendly bureaucracy," Ramdas Kamath, senior executive vice president who heads infrastructure and administration at Infosys, told Business Standard.
"All these factors are far more important than any tax incentives," he said.
The firm has seen rise in its attrition level in the first quarter of current financial year at 20.60 per cent, up 400 basis points on sequential basis. With more centres in such cities, the company aims to tame the attrition as stickiness of employees in smaller cities is usually high. "We already have a good all India presence. With this new centre, it will be further enhanced," Kamath said.