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"The minimum land area requirement will remain as it is for the IT sector — 10 hectares and minimum built-up area of 1 lakh sq. metres." an official release said.

New Delhi , June 7

In a bid to lend greater policy clarity and attract more investments into special economic zones (SEZ), the Empowered Group of Ministers (EGoM) on SEZs has resolved contentious issues relating to the minimum land area requirement for setting up such zones in the IT, gems and jewellery, biotech and non-conventional energy sectors.

While retaining the initially proposed minimum land area requirement and minimum built-up area for IT SEZs, the EGoM has, however, tightened the norms for SEZs in the gems and jewellery, biotech and non-conventional energy sectors by specifying a minimum built-up area apart from the already existing minimum land area requirement.

IT sector

For the IT sector, the EGoM decided to retain the minimum land area requirement that had already been notified in the SEZ Rules issued by the Commerce Ministry— 10 hectares and minimum built-up area of 1-lakh square metres. "The minimum land area requirement as already notified in the SEZ Rules by the Ministry of Commerce and Industry will remain as it is for the IT sector — 10 hectares and minimum built-up area of 1 lakh sq. metres," an official release issued after Tuesday's meeting of the EGoM on SEZs said.

This implied that the original proposal of the Commerce Ministry (minimum land area requirement of 10 hectares and minimum built-up area of 1 lakh sq. metres) has found favour with the EGoM and not the Finance Ministry's suggestion of a minimum land area requirement of 25 hectares for IT SEZs.

Faced with differing views between the Finance and the Commerce Ministries over the size of IT SEZs, the EGoM had in its earlier meetings even mulled removal of the minimum land area requirement.

It had also looked at specifying a minimum built-up area norm depending on the type of cities where they were located.

As regards the SEZs in the gems and jewellery sector, the EGoM, headed by the Defence Minister, Mr Pranab Mukherjee, has now stipulated a minimum built-up area of 50,000 sq. metres apart from the already specified minimum land area norm of 10 hectares.

For biotech and non-conventional energy SEZs, the EGoM has stipulated a minimum built-up area of 40,000 sq. metres besides the minimum land area requirement of 10 hectares.

For all other multi-product, multi-services and sector-specific zones, the land area requirement would remain the same, as already notified in the SEZ rules. For multi product SEZs, the land area requirement is 1,000 hectares, multi-services— 100 hectares and sector specific SEZs--100 hectares.

The EGoM has now specified that the processing area in large multi-product SEZs would be 35 per cent against the 25 per cent stipulated in the SEZ Rules 2006. For sector-specific SEZs, the processing area norm remains at 50 per cent.

Commenting on the EGoM decisions, the Commerce and Industry Minister, Mr Kamal Nath, said the resolution of the issues would lead to significant flow of investments into such zones.

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