Economy

Investors not keen on SEZs anymore; 57 to surrender zones

PTI New Delhi | Updated on January 24, 2018 Published on February 10, 2015

Reflecting an erosion of investor interest in special economic zones, as many as 57 developers, including JSW Aluminium Ltd and Parsvnath, have decided to surrender their SEZ approval applications.

The Board of Approval (BoA), chaired by Commerce Secretary Rajeev Kher, would take a decision on these applications in its meeting on February 20.

Out of 57 SEZs, 35 tax-free enclaves are from the IT/ITeS sector, while other sectors include engineering, biotechnology, gems and jewellery, pharmaceuticals and textiles.

“In (these) cases, formal approval has been granted by the Department of Commerce. However, since there is no significant progress made by the developer/ co-developer, the concerned DC has proposed cancellation of the formal approval granted to the developer,” the agenda note of the BoA meeting said.

Parsvnath SEZ Ltd had proposed an IT/ITeS zone in Indore. The SEZ was notified in July 2007.

“The developer has not made any progress in setting up the SEZ, attributing the delay to the economic slowdown and has stated that there is no plan to start any activity at present.

“Accordingly, the Development Commissioner (DC) has recommended cancellation of formal approval and withdrawal of notification,” it said.

Similarly, DLF Commercial Developers too had proposed an IT/ITeS zone in Noida.

“The developer has informed that they are not developing the SEZ due to lack of viability. DC has recommended cancellation of formal approval,” it said.

JSW Aluminium Ltd had proposed a sector specific zone in Andhra Pradesh.

“The formal approval expired on February 26, 2012. The project has been held up pending signing of the agreement for supply of bauxite and environmental clearance for mining of the ore.

“These hurdles are yet to be cleared. Accordingly, DC has recommended cancellation of formal approval,” it added.

Other developers who have sought the Government’s approval to cancel their zones include Navi Mumbai SEZ, Deccan Infrastructure and Land Holdings, Gujarat Industrial Development Corporation and Delhi Metro Rail Corporation.

Earlier, over 50 SEZ developers had already surrendered their projects.

SEZs, which emerged as major export hubs in the country, started losing their sheen after imposition of minimum alternate tax (MAT) and dividend distribution tax (DDT).

Industry body CII has sought a reduction in MAT on SEZs to 10 per cent in the upcoming Budget to boost investments.

Exports from these zones increased from Rs 22,840 crore in 2005-06 to Rs 4.94 lakh crore in 2013-14.

The Commerce Ministry is struggling to increase exports as the country’s shipments in the last three years have been hovering around $300 billion.

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Published on February 10, 2015
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