The new guidelines to revive Special Economic Zones may get delayed as Commerce and Finance Ministries have differences over several proposals. “The Finance Ministry has objections on every issue... on land, on setting up of power plants, and incentives to units in under-developed states...,” a senior official said.

The official said exports from special economic zones (SEZs) have increased significantly and account for about 30 per cent of the country’s total exports.

Need for revival

“Increasing exports, huge investments and employment for lakhs of people clearly reflects that these zones are contributing to the country’s economy. We need to revive them,” the official added.

Exports from SEZs increased to Rs 3.65 lakh crore in 2011-12 from Rs 2.20 lakh crore in 2009-10. With an investment of Rs 2.02 lakh crore, over 845,000 people have been employed in these zones. To boost investors’ confidence in SEZs, the Commerce Ministry plans to provide incentives for developers who want to set up SEZs in remote and undeveloped areas.

Land area requirement

The Commerce Ministry has proposed to relax minimum land area requirement for different categories of SEZs, besides extending to the units the benefits of export schemes already available to entities outside the zone.

The initial phase of the SEZ scheme, launched in 2006, saw developers lining up in big numbers for projects. But after the imposition of Minimum Alternative Tax and Dividend Distribution Tax on SEZs in 2010-11, investors started developing cold feet as tax incentives were the major attraction for setting up of these enclaves.

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