Govt Approves Six New SEZs

The government on Friday approved the setting up of six new special economic zones or SEZs, areas which receive special tax and duty concessions for manufacturing and exports. Among those approved are a solar SEZ by infrastructure company Lanco in Chhattisgarh and a copper SEZ by Sterlite Industries in Tamil Nadu. The approvals also allayed fears that the SEZ policy was losing steam. Companies like DLF , India’s biggest real estate developer, had wanted to surrender their SEZ licences during the downturn of last year.

Against a pre-recession tally of 577 approved SEZs, the total number of approved SEZs stood at 580, including the six approved on Friday, the ministry of commerce and industry said. The number of approved SEZs had fallen to 573 in December last year and to 571 in February this year as some of the developers bailed out of the projects on the basis of perceived commercial inviability. Both exports and employment also rose during the first nine months of the current financial year, the ministry added. Direct employment went from 3.55 lakh to 4.9 lakh while exports from SEZs rose even faster.

Against just under 1 lakh crore ($21.9 billion) worth of exports during 2008-09, exports from SEZs hit 1.52 lakh crore ($32.3 billion) during just the first nine months of 2009-10. India’s total exports during the year are expected to be around $160 billion. As a result, the growth of exports from SEZs during 2009-10 is expected to be even faster than the 50% growth seen during the previous year. Maharashtra leads the nation with 109 approved SEZs, out of which 15 are operational, according to a chart released by the government two months ago. It was followed by AP, with 102 approved SEZs and 21 operational ones, followed by Tamil Nadu, Gujarat and Karnataka.

Andhra govt issues notices to SEZ developers over land use

TREN /Mar 04, 2010 – The Andhra Pradesh government has slapped notices on the developers of special economic zones (SEZs), asking them to explain delays in project execution and seeking details on the use of land allocated to them, after opposition parties alleged that many SEZs were misusing land acquired with government support.A body representing SEZ developers, however, blames the delays on the global economic downturn and the government’s failure to provide assured infrastructural support.Andhra Pradesh has 73 notified SEZs—the highest in the country. Another 30 SEZs are awaiting notification, giving the state 103 of the 346 SEZs approved by the Union commerce ministry nationwide.“Of the 73 notified SEZs so far in the state, with a projected investment of some Rs70,000 crore, only 19 SEZs have become operational, attracting an investment of some Rs10,000 crore,” said Kanna Lakshminarayana, Andhra Pradesh’s minister for major industries and commerce.“The government would take back the land allotted to the developers of SEZs if they failed to convince the authorities on delays in setting up industrial units or (have been) found using the lands for other purposes,” Lakshminarayana warned.The notified SEZs had acquired 27,722 acres of land across the state, the minister added.Opposition parties have claimed that the developers of these SEZs were trying to make money by using the land for real estate development.T. Sunil Reddy, chairman of the Andhra Pradesh SEZ Developers’ Association, said the global economic slowdown was largely responsible for the delay in the implementation of SEZ projects. The government’s inability to provide the infrastructure assured to them had also played a major role in raising the development cost and turning the SEZ projects unviable, he added. 

As many as 42 SEZs are coming up in state capital Hyderabad or its neighbouring districts of Ranga Reddy, Medak and Mahaboobnagar, where the cost of land acquisition is very high.B.R. Meena, vice-chairman and managing director of Andhra Pradesh Industrial Infrastructure Corp. Ltd (APIIC), the nodal agency for SEZs in the state, admitted that government agencies had failed to provide the assured infrastructure to many SEZ developers.“APIIC is developing 20 SEZs on its own and had assisted another 23 SEZs in acquiring land. While two more SEZs are also (being developed) by the government agencies belonging to urban development, 28 SEZs are being developed by the private players,” said Meena.APIIC, he added, was preparing a report on how many SEZs had failed to take off despite the government fulfilling its infrastructural obligations.Reddy of the SEZ developers’ association said the absence of additional tax benefits in the proposed extension of the Software Technology Parks of India Scheme was also holding back small and medium information technology (IT) and IT-enabled services (ITeS) firms from moving to SEZs.“Another major reason for IT/ITeS units not showing interest in SEZs is the proposed new direct tax code that threatens to take away tax exemptions to SEZs,” said the chairman of a private IT/ITeS SEZ, who did not want to be named.As many as 43 SEZs in Andhra Pradesh were to host IT and ITeS firms.

SEZ concession sought for residential housing projects

Sunil Mantri, Chairman, Sunil Mantri group

The Government must continue the tax benefit under Section 80 IB to create huge housing stock, particularly in budget segment across the country.
This may help in the creation of approximately 10 million housing units in 5-7 years, which is almost 50 per cent of Government estimated housing shortage as on date.
Currently, a retail customer for a loan up to Rs 30 lakh is being treated as priority sector.
However, developers who are undertaking such projects are not treated as a priority segment; allowing this will help serve, particularly the low-income/middle-income group.
It will boost huge creation of the affordable housing if loans to these projects are considered as for priority sector.
SEZ creation has led to a lot of activity in the industrial and production centres.
In a similar way, if affordable housing for residential SEZ can be created in large projects of above 25 acres, it will reduce substantially the construction costs as well as help in creating satellite townships which will reduce the burden and pressure on the cities. The Government only needs to give the SEZ concession (which would be called residential SEZ) and would create a large number of the houses across the country. Source: Hindu BusinessLine