SEZs in India to Grow
India Real Estate Blog
A well implemented and designed SEZ can bring benefits for the country .it can increase employment, more FDI, Economic growth, foreign exchange earnings, international exposure, transfer of the new technologies and skills. The Commerce and Industry Minister, Mr Kamal Nath, has hopes of drawing Rs. 1,00,000 crore worth of investments over the next three years with an employment potential of over five lakh, besides indirect employment during the construction period of the SEZs: investments in sectors such as information technology, pharmaceuticals, biotechnology, textiles, petro-chemicals and auto parts.
The govt of India has now backed off from its earlier decision to limit to 150, the number of Special Economic Zones with unprecedented tax concessions that could be established within the country. The empowered Group of Ministers on Special Economic Zones (e-GoM) decided instead to welcome as many as would apply for the coveted SEZ status. So far, the Board of Approvals has already given the in-principle nod to 150 SEZ applications. Since the board continued to receive several new applications, the e-GOM was approached for directions.
Mr. Kamal Nath, the Union Commerce and Industry Minister said that fresh approvals would be made only after 75 SEZs were made operational. The question of revenue loss from SEZ located companies was shrugged off by the minister who claimed that could be ascertained only when the SEZ was functional. As for the several lakh acres of land that would be required for SEZ allotment, the answer according to the minister lies with the state governments. The empowered Group of Ministers on Special Economic Zones is headed by the Define Minister, Mr Pranab Mukherjee and includes the Finance Minister, Mr P. Chidambaram, and the Deputy Chairman of the Planning Commission, Mr Montek Singh Ahluwalia.
Special Economic Zones (SEZs) in various segments such as multi-product, information technology, biotechnology and frontier areas of technology adding up to 169 proposals in all will be examined by the Board of Approval. The Board is chaired by the Special Secretary in the Department of Commerce, Mr Gopal K. Pillai. 105 proposals have already been granted approval since the SEZ Act of 2005 came into being. Of these only 14 have been notified so far. Among which are Biocon Ltd for biotechnology, which is coming up in 36 hectares in Bangalore, Dalmiya & Co Ltd for IT and ITES and Apachee Investment Holding Ltd for footwear in Hyderabad.
SEZs are notified only after land acquisitions and other formalities are completed with a time lag usually taking place between formal clearance and the notification period. There are 28 SEZs operational in India including converted former free trade zones and export processing zones. Tamil Nadu has the maximum of 7 SEZs. Gujarat has five while Andhra Pradesh and West Bengal have three each. Maharashtra, Karnataka and Rajasthan have two SEZs each and UP and Punjab have one each. The biggest in the sector-specific SEZs among current proposals coming up for approval is from Uttaranchal Government’s State Industrial Development Corporation for a 440 hectares multi-product SEZ to be located in Sitarganj, followed by Brandix India Apparel City Pvt Ltd (BIAC) for textile products in 405 hectares in Visakhapatnam, Andhra Pradesh. Among the new proposals for approval in the IT sector SEZs are Infosys Ltd, Pune, and Ansal Properties and Infrastructure Ltd in Badshahpur, Gurgaon, and Haryana.
In additional 16 multi-product SEZs, including seven pending cases, new proposals include Omaxe Ltd for over 6,070 hectares in Alwar district, Rajasthan and Indian Infrastructure Corporation Pvt Ltd spread over 1,011 hectares in Anjar Taluka of Bhuj district in Gujarat.
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