The Government has decided to eject non-serious players from Special Economic Zones (SEZs).

As a result, the Board of Approval (BoA) for SEZs has started rejecting demands of SEZ developers seeking time to execute their projects on finding that they had not done any work on the ground.

On May 31, the BoA had rejected Uppal Developers' request for a third extension of the validity of the formal approval for its 109-hectare multi-services SEZ in Haryana. On July 22, it turned down the application of South Coast Infrastructure Development Company of Andhra Pradesh Ltd for a third extension of the in-principle approval for its 118-hectare Building Materials SEZ in Andhra Pradesh.

Land grab allegations

The move assumes importance in the wake of the Commerce Ministry's recent decision to have a re-look at the cap on the area for multi-product SEZs. This follows allegations by farmers of land grab by corporate houses for industrial projects. The Ministry feels that SEZ norms need to be reviewed to take into account the latest perspectives on land and infrastructure.

According to official data, of the 585 SEZ proposals that have got formal approval (given to projects having the required land), only 133 are operational. Official sources said the Government does not want any developer sitting idle on the approvals.

However, it understands that the imposition of the Minimum Alternate Tax (MAT) and Dividend Distribution Tax on SEZs as well as the economic slowdown has hit the development of SEZs. Also, the Direct Taxes Code (DTC) proposes to withdraw profit-linked incentives for SEZs.

Sources said the Government will soon ask the States and developers the reasons for the delay in implementation of SEZs and seek suggestions on what can be done to ensure faster execution of these projects.