Three cheers for wine and dine. Now, three ideas to make GIFT city shine

Source:  The Times of India

GIFT City (Gujarat International Finance Tec-City) recently allowed liquor consumption on its premises. There was some opposition to the move, given Gujarat’s existing no-liquor policy. However, government insisted (rightly so) that to make GIFT City a global financial centre, it needs to offer global business leaders and talent a lifestyle similar to other leading financial and business cities of the world.

Tax incentives and beer bottles only go so far. A full focus on quality of life is what will make GIFT truly shine. Ideally, this should be the case in every Indian city

GIFT City (Gujarat International Finance Tec-City) recently allowed liquor consumption on its premises. There was some opposition to the move, given Gujarat’s existing no-liquor policy. However, government insisted (rightly so) that to make GIFT City a global financial centre, it needs to offer global business leaders and talent a lifestyle similar to other leading financial and business cities of the world.

This piece is neither about alcohol politics, nor is it endorsing consumption of alcohol. Quite the contrary. I believe there is mounting scientific evidence about the ill effects of alcohol on one’s health. These include poor quality sleep, lower immunity, brain damage, obesity, liver problems, possibility of abuse and addiction, to name a few. Alcohol, wherever possible, is to be avoided.

Yet, the move to allow it in GIFT City is welcome and necessary for it to reach its stated aim of becoming a leading global financial center. 

Show Blurbs GIFT City, for the uninitiated, is a 16-sq-km area demarcated near Gandhinagar in Gujarat for the purposes of aiding business, in particular finance, trading exchanges and other services. The city was announced in 2007, and has made moderate progress in the last 15 years. It is finally gaining traction with leading global banks and tech companies such as Google setting up centers in the last couple of years. It has a demarcated Special Economic Zone (SEZ) where companies get various tax incentives. To support the companies present, there are also other allied industries such as residential property, education, hospitality and medical services.

It is an excellent idea as it is much better if we create our own SEZs rather than have India focused companies based in Dubai, Singapore or Hong Kong. Of course, making SEZs within an existing nation is not easy. Such regions require their own rules and laws, particularly in areas related to business and commerce. Since any such city will be located on Indian territory, special laws would require major national legislation and political will. However, given the political stability we have now, and the work already done in GIFT, there is a great opportunity to take the SEZ to the next level.

Will the availability of alcohol help? Surely it will. This isn’t just being able to have a glass of beer, but the signal it sends out to potential investors. That India is open for business, willing to change, even if that means taking tough decisions. Making GIFT reach its full potential will require a few more bold steps. If taken, these will truly make it a world-class international destination, located within India. 

Here are the top three ideas:

1. Separate GIFT business and tax laws, with separate courts: The actual legislation required at the national level to do this will be intense, but it will set the stage for other GIFTs. Investors around the world place a huge premium on a functional, clear, precise legal system to do business. GIFT will need this to invite more investors. ShowBlurbs

2. A domestic immigration of sorts: GIFT city residents would have separate IDs, and one would need one to live there. Some of this is already planned given that the liquor permits will only be for GIFT city residents. However, clear GIFT residency will allow other benefits as well. Different tax laws can apply to not only companies in GIFT, but also to people living there. This will incentivise people to move there. For instance, we can have GIFT residents qualify for an NRI type, or a modified NRI-type status.

3. Building a world-class city with a quality of life: A great city is not just a place that allows you to make money. It is also a fun place to live. And fun isn’t just about going out drinking in bars. Parks, running tracks, cycling tracks, sports areas (for the public, not just for competitions), performing arts spaces, children’s activities, senior citizens’ activities — all this can make a new city truly come alive and living there a great experience. Clean streets and good water matter too. Tax incentives and beer bottles only go so far. A full focus on quality of life is what will make GIFT truly shine. Ideally, this should be the case in every Indian city.

GIFT seemed like a far-fetched idea 15 years ago. However, given where India is right now, it looks like we are at a special inflection point. With some more reforms and efforts, GIFT can indeed be taken to the next level, and maybe its success will be a template for other cities.