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Centre to go slow on IT SEZ approvals

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No more in-principle approval for the time being

MR G.K. PILLAI
MR G.K. PILLAI

Our Bureau

New Delhi, Nov. 8

The Centre has decided to go slow on granting formal approval for IT special economic zones. The Board of Approvals, the nodal authority, has also decided that for the time being no more in-principle approval would be given for such zones, the Commerce Secretary, Mr G.K. Pillai, said.

So far, formal approvals have been given for 148 IT SEZs and in-principle approvals to about 75 such zones.

"The time has come when we are probably reaching near the limits, as regards IT SEZs. Perhaps, even the 148 will not come. We may have a casualty rate of 25 per cent. There has to be a debate on having a ceiling on the number of IT SEZs. We have no ceiling at the moment," Mr Pillai said at a conclave on SEZs organised by Assocham.

No ceiling

On having a cap on SEZs for other sectors, he said that the question does not arise. "We are nowhere near reaching any ceiling in the other sectors. In textiles, there are only 16 SEZs, while in pharma it is 13. There is potential for more in both the sectors. In all the other sectors, SEZ approvals are in the single digits," he said.

Meanwhile, the Commerce Ministry has decided to appoint an independent organisation to study tax losses from SEZs. "The report would hopefully be out in the next 3-6 months," he said.

Ceiling for private SEZs

The Commerce Secretary also said that a debate is needed on having a ceiling on the total holding of developers. "We have put a minimum. The issue of having a ceiling for private SEZs was never considered. It's an issue that has now come. The Left parties have called for a ceiling," Mr Pillai said.

On the Left parties' suggestion that land should be leased to private developers and not sold to them, Mr Pillai said that the State Governments have been encouraged as far as possible to give them on lease. "Most of the State Governments are giving it on lease."

On agriculture land, Mr Pillai said that the BOA has laid down the guidelines and each case was being monitored.

CPI's call

Meanwhile, the Communist Party of India Secretary, Mr D. Raja, said that the Government must address the issue of land acquisition. "SEZs should be built only on non-agricultural land," he said.

Mr Raja said that the Left parties also want the government to revisit the tax concessions under the SEZ policy.

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(This article was published in the Business Line print edition dated November 9, 2006)
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