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States can't scrap notified SEZs: Centre

The Centre questions the authority of the Goa govt to recommend scrapping of notified special economic zones, reports Gaurav Choudhury.

business Updated: Jan 02, 2008 20:00 IST
Gaurav Choudhury
Gaurav Choudhury
Hindustan Times

The Centre on Wednesday questioned the authority of the Goa government to recommend scrapping of notified special economic zones (SEZs).

After a meeting of the board of approval (BoA) commerce secretary G.K.Pillai said: “There is no provision under law (for states) to recommend de-notification. They have no locus standi to withdraw the notifications to the SEZs.” Notified SEZs, he said, have already become legal entities and therefore cannot be de-notified.

The issue has threatened to snowball into a major controversy after the Goa government announced the scrapping of all SEZs in the state last week. The decision reportedly came after a specially constituted task force recommended that SEZs would be “detrimental to the overall interest of Goa”.

It said the benefits of industrialisation can be reaped without SEZs, by extending incentives to incoming industries.

Anti-SEZ protests have been brewing in the state for the past few months cutting across all political parties. So far 10 SEZs have been granted in-principle approval, of which three were notified including Cipla's Meditab Specialities, Peninsula Pharma Research Centre and the one proposed by K. Raheja Corp.

“Duty-free equipment has also started coming in. How will the state government compensate the developers? Developers may even approach the court against the decision of the Goa government,” Pillai said.

Special economic zone proposals go through a three-stage process. They are first considered for in-principle approval based on the merits of the applications, followed by a formal approval and finally a notification. So far formal approvals have been granted for setting up of 404 SEZs, out of which 187 have been notified.

Pillai said that over Rs 52,193 crore have been invested in these notified SEZs providing direct employment to over 59,356 people. The BoA on granted formal approval to 24 proposals on Wednesday and extended in-principle to 4 SEZ proposals.