SEZ policies to be revised by Government
NEW DELHI: Beset by the declining exports, the government has revisited its policies on special economic zones (SEZs) with the hope of revitalizing the interest of investors. The government is looking at few changes following the demands from industry as well as the state governments.
With the state governments as well as industry’s citing problems pertaining to land acquisition, the department of commerce is considering the relaxation of the minimum area requirement for more sectors within the final amendments in the SEZ rules. State governments have demanded relaxation of land requirement norms as they do not have sufficient land.
These changes are already being looked at with serious consideration even though the announcement made by commerce and industry minister Anand Sharma three months ago is yet to be put into effect by the government. Agro-processing SEZs have been identified by the department as the chief thrust area. Plans are being made to reduce the minimum land requirement to 10 hectares from the previous requirement of 100 hectares for these SEZs.
Amongst the changes that are being mulled is the doctrination of halving the norms pertaining to the minimum area of land required to establish multi-services SEZs to 50 hectares from 100 hectares. Furthermore, multi-services SEZs are going to be considered on par with single-product SEZs. According to the recent changes, SEZ developers would be enabled to add another sector on additional contiguous 50 hectares on multi-product SEZs.
In this fiscal during the month of April, the government had halved the minimum area requirement for single-product SEZs to 50 hectares and that for multi-product SEZs to 500 hectares with the prime objective of giving a fillip to exports. The minimum land requirement norms for multi-services SEZs were left unchanged, while in the meantime the same norms for IT SEZs were scrapped. However, these changes remain unimplemented.
As per sources, these proposals were put on the fast track by Sharma, who also directed ministry officials to ensure that the latest norms are constituted and implemented before the end of the month. The proposed notification is yet to be vetted by the law ministry. Once accepted, these changes would supplement the policy alterations made three months ago by the government.
Falling exports has been applying additional pressure on the present account deficit, which has widened to an all-time high of 4.8% of GDP during 2012-13. Continued contraction within exports in the present fiscal has set alarm bells ringing among policymakers who are now casting about for various methods to boost the export figures.
Exports from India have declined by 1.41% which amounts to $72.4 billion within the first quarter of 2013-14 fiscal. SEZs, which have witnessed 31 per cent growth in exports, despite an overall contraction of 1.86 per cent in the country’s outbound trade, are being perceived by the government as the new savior.
