The Hindu Business Line : DLF’s IT economic zone denotification ‘a simple one’

Real estate company DLF’s plea for denotification of its not-yet-built information technology special economic zone (SEZ) in the Capital would be acceded to as the company has not done any development.

Highly placed sources told Business Line here that the Government of India does not need to frame any rules for such denotification as the Board of Approval (BoA) has the discretionary power to denotify an SEZ being sought by the developer on the grounds of worsening economic situation abroad and slowdown in the economy. They said no elaborate procedure is involved in such denotification as a simple decision by the BoA could do.

The sources said that out of the 270 notified SEZs, only one had sought for denotification and this in no way detracts the ongoing activities in other zones.

They also recalled that DLF itself has been implementing ten other SEZ projects and it has sought denotification of only one IT SEZs in the Capital.

When contacted, the Export Promotion Council for SEZ and 100 per cent EOUs, Director General, Mr L.B. Singhal, said that SEZ development would take place more aggressively after the crisis is over.

“If the product is ready, they would be able to encash the sale,” he added.

However, Mr Singhal said, there are certain problems which need to be addressed forthwith. SEZ developers do not have access to funding as SEZs are still treated as real estate and not infrastructure activity as recommended by the Empowered Group of Ministers (eGoM) headed by Mr Pranab Mukherjee, the Union External Affairs Minister.

Once this recommendation is implemented by the apex bank, the SEZ developers could access both external commercial borrowings as also domestic financial institutions at competitive rates.

Similarly, he said other recommendations of the eGoM such as their demand for refund of service tax, release of DEPB/duty draw back for supply of goods for domestic tariff area to SEZ developers and Cenvat credit for supply of goods to SEZ developers should also be implemented so that the SEZ juggernaut would make the difference to the country’s exports and investment scenario.

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