The Hindu Business Line : ‘More States must enact SEZ Acts’

New Delhi, Oct. 17 State Governments must take a proactive approach and enact SEZ Acts at their level to boost investments in such zones, Mr L.B. Singhal, Director-General of the Export Promotion Council for EOUs and SEZs (EPCES), has said.

They should also provide single window mechanism for clearance to SEZ units/developers, Mr Singhal said at a PHDCCI organised international tax conference here on Friday. Although the SEZ scheme was introduced in the export and import policy of 2000, it was pointed out that the economic activity in SEZs got a boost only after the SEZ Act was enacted by the Central Government in June 2005 and operationalised from February 2006.

“Investors look for stability in fiscal regime and clarity in policies. Only few States have enacted SEZ Acts. The others must also do it. The general refrain from international investors is ‘no major surprises’,” he said, pointing out that the notified SEZs have received investments of Rs 73,348 crore since February 2006. Total direct employment in SEZs stood at about 3.5 lakh persons.

By 2009, investments in SEZs are expected to be about Rs 2,00,000 crore and direct employment provided by such zones is likely to be about 8 lakh people.

So far, formal approvals have been given for 531 SEZs. Out of these, 260 has been notified. Exports from SEZs have zoomed from $5.16 billion in 2005-06 to about $16.4 billion in 2007-08.

SEZs’ share in India’s total exports increased from 4 per cent in 2002-03 to 10.6 per cent in 2007-08. Meanwhile, indications are that the empowered group of ministers on SEZs would, at their next meeting, take a call on the interpretation of Section 10AA of the Income-Tax Act.

SEZ units are keen that the formula for tax exemption of their export profits be modified as they claim that the current one curtailed the quantum of benefits. The Finance Ministry, however, is satisfied with the formula and maintains that it was a conscious decision to have it in the current form , sources said.

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