Indore SEZ Development Commissioner Ishwar Singh talked to Manoj Ahuja about various aspects of special economic zones. Excerpts:
Has the Indore special economic zone (SEZ) lived up to its potential? What more could be done to attract companies to Indore in terms of infrastructure development?
Of the total notified land of 1,113 hectares, 600 hectares of land has already been utilized and only 500 hectares of land is available for utilization. More fiscal concessions, particularly exemption from the minimum alternate tax and dividend distribution tax, will attract the companies to set up units in the SEZs. Even though certain concessions such as exemption from VAT, local taxes, and municipal taxes have been provided for in the SEZ policy of the state government, the same could not be made available to the units, pending issuance of notification in this regard. In case, these concessions become available to the units, this would also attract more companies.
What has been the impact of minimum alternate tax on the SEZ in terms of investment flow?
During the MAT exemption regime up to March 2011, letters of approval were issued to 89 units. However, after withdrawal of the exemption from MAT effective from March 2011, the number of approvals reduced to one, two and three during 2011-12, 2012-13 and 2013-14, respectively. This shows a steep decline in the number of companies desirous of setting up of their units in SEZs.
Apart from Pithampur, SEZs in Madhya Pradesh have failed to flourish. What do you believe is the reason for that?
The SEZs in Madhya Pradesh have been flourishing over the period which may be ascertained from the fact that big companies like TCS Limited and Infosys Limited have already commenced their construction activities in their SEZs. Impetus Infotech India Limited is also completing the prerequisite formalities for commencement of its construction work.
What more can the government at the state and central level do to attract more investments to the SEZs?
The governments both at the state and Centre have been making efforts to make the SEZ scheme a success. Having said that, there is a need to instil confidence in investors and signal the government’s commitment to a stable SEZ policy regime to generate greater economic activity and to create more employment opportunities, to further simplify the procedures, and also to sensitize single window clearance on matters relating to central as well as state governments.