Converting SEZs into Cyber City: Proposal deferred week ago to be tabled before Haryana cabinet on July 29

The cabinet memorandum for policy amendment had been deferred on July 21 after home minister Anil Vij objected to “table agendas”

A controversial proposal to amend the policy pertaining to granting licences for development of cyber parks and the Cyber City, and thus enabling the conversion of special economic zones (SEZs) into Cyber City, which was withdrawn in the last cabinet meeting on July 21, is likely to come up for the consideration of the council of ministers on July 29.

The proposal enabling conversion of SEZs to Cyber City seems controversial at a time when the central government is planning to enact a legislation by bringing the Development of Enterprise and Service Hubs Bill in the Parliament to reform and refashion the fading SEZs in the country. (Representative Image/HT File)

The cabinet memorandum prepared by the town and country planning department for policy amendment coupled with two more agendas had been deferred after home minister Anil Vij objected to the “table agendas”. All three memorandums were brought as table agendas, which means they were brought straight to the meeting without ministers going through them.

Questions raised over central law to remodel SEZs

The proposal enabling conversion of SEZs to Cyber City seems controversial at a time when the central government is planning to enact a legislation by bringing the Development of Enterprise and Service Hubs Bill in the Parliament to reform and refashion the fading SEZs in the country.

Union finance minister Nirmala Sitharaman in her 2022-23 budget speech had said that the SEZ Act will be replaced with a new legislation, which will enable states to become partners in the development of enterprise and service hubs. This will cover all existing and new industrial enclaves to optimally utilise available infrastructure and enhance competitiveness of exports. The timing of the memorandum has thus raised eyebrows, with stakeholders contending that the Haryana government should hold back its move in light of the upcoming central law. There are 22 notified SEZs in Haryana and only seven are operational. Realty sector experts said that if an SEZ gets de-notified, the land chunk will inevitably become agricultural in nature. Converting it into a cyber city or park by amending a policy will not help as there are two statutes – The Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Act and the Haryana Development and Regulation of Urban Areas Act – which would need some amendments.

Since SEZs are a subject of the department of commerce and industries, any decision pertaining to them cannot be without consultation with the former. “This move will be counterproductive to the state’s plans to develop the Global City Project in Gurugram, in which high-density mixed land use, development of residential, commercial, IT and IT-enabled services, and institutions will be allowed,’’ said an official, not wishing to be named.

The Global City project of Haryana State Industrial and Infrastructure (HSIIDC), experts said, will have to compete with de-notified SEZs that will seek conversion to Cyber City and parks. Investors intending to start Cyber City and parks on the land parcel designated in the master plan will have competition from the de-notified SEZs, which as per the cabinet proposal can get a licence at the rate of ₹10 lakh per acre, they said.

Changes proposed for permissible usage

As per the changes proposed in the cabinet memorandum, the permissible use of the area for the information technology component in a cyber city colony has been reduced to 50-60% from the minimum 66% approved in July 2020. On the other hand, the residential component has been increased to 35-40% from a maximum 25% and commercial component increased to 5 to 10% from 4 to 8%. The amendment also proposes to reduce the minimum area norm for establishment of Cyber City from a minimum of 50 acres to above 20 acres for city and from 5 to 50 acres to 5 to 20 acres for parks.

While additional chief secretary (ACS), town and country planning, Devender Singh refused to comment on the proposed policy amendment saying cabinet notes are confidential, chief principal secretary to the chief minister, DS Dhesi who looks after the town and country planning in the CM’s office did not respond to text messages.

The cabinet note though said that a representation from National Real Estate Development Council (NAREDCO) suggested changes in the existing policy to keep pace with the fast-changing business dynamics. “The Union government has adopted a sunset clause in the SEZ Act, on account of which only units that started production on or before June 30, 2020 have been granted a phased income-tax holiday for 15 years. Since, several SEZs are yet to be established and commence operation, it is envisaged that many such SEZs, which are at different levels of development, are likely to seek conversion to Cyber City,” it said.