SEZs get a Rs 55,000 cr push

Barring Reliance Industries, none of the proposals for which approval has been granted in principle will be affected by Thursday’s announcement of a ceiling on the land area of SEZs.

Barring Reliance Industries, which has plans to set up giant special economic zones in Gurgaon and Maha Mumbai, none of the proposals for which approval has been granted in principle will be affected by Thursday’s announcement of a ceiling on the land area of SEZs.

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The nodal authority for approving SEZ proposals has so far okayed 234 proposals. Of these, 63 have been notified and 83 were cleared for notification by the empowered group of ministers on Thursday.

Land acquisition for these 83 proposals has been completed and verified. “The remaining 88 proposals will be approved after completion of due procedures,” said Commerce and Industry Minister Kamal Nath.

Among these are Infosys’ SEZs at Pune and Mysore, Wockhardt’s pharmaceuticals SEZ at Aurangabad, Jindal Stainless’ steel SEZ at Kalinga Nagar, Mahindra World City at Jaipur, and Suzlon’s infrastructure SEZ at Coimbatore. Investments lined up for these 83 proposals are around Rs 55,000 crore.

Most of the applications of multi-product SEZs have sought land in the region of of 1,000-2,500 hectares, except the two proposed by Reliance Industries. When contacted, a Reliance Industries spokesman declined to comment.

The 234 SEZs are projected to cover an area of 33,808 hectares, which works out to a tenth of a percentage point of the land under cultivation in India. The commerce ministry said investment of Rs 13,435 crore had already been made in the 63 notified SEZs covering various sectors and products.

The ministerial group has also set the minimum processing area for core activities at half the land held in multi-product SEZs. Earlier, the minimum processing area requirement was 35 per cent, with a provision for relaxation up to 25 per cent; and it was 50 per cent for sector-specific SEZs.

For SEZs pertaining specifically to information technology, bio-technology, and gems and jewellery, the minimum area requirement is 10 hectares with built-up processing requirement of 100,000 sqaure metres, 40,000 sqaure metres, and 50,000 sqaure metres, respectively.

Industry chambers welcomed the decision to restart the process of granting approvals to SEZs. Associated Chambers of Commerce and Industry of India (ASSOCHAM) welcomed the decision to set a ceiling of 5,000 hectares for SEZs and described it as a “praiseworthy step that will settle for good the controversies over SEZs”.

The Confederation of Indian Industry (CII) hoped “decision would put an end to compulsory land acquisition by state governments and limits on the size of SEZs will end the ambiguity about their future”.

The Federation of Indian Chambers of Commerce and Industry (Ficci) echoed this opinion. ”The decision will clear uncertainties and give a clear signal that SEZs are here to stay,” a Ficci statement said.