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Land first, SEZ green signal later
- Six-month deadline to start work as govt readies whip

New Delhi, Jan. 20: Special economic zone developers may now have to acquire land before they approach the government to clear their projects.

Once approval is given, the companies could be set a six-month deadline to start work or watch the clearance cancelled.

The empowered group of ministers (EGoM) is considering these two changes to the SEZ law to ensure that only companies that can deliver get into the arena, commerce secretary G.K. Pillai said today.

The first change means turning SEZ clearance into a one-step process, doing away with the stage of in-principle approvals that now precedes the final approval.

In-principle approvals are given to proposals before the land has been acquired. Once he has the plot, the developer goes back to the Board of Approvals for final clearance.

The second proposed change, which forces developers to notify within six months that they have started work, would tighten the screws further on laggards.

“We propose to make it mandatory for developers to complete all formalities for notification… within six months of getting approval, failing which their clearances will be cancelled,” Pillai said.

The developers of some 70 to 80 SEZs have not got their projects notified though more than six months have passed since the final approval.

Pillai said when the EGoM meets on Monday after a gap of five months, “every issue that has been raised in relation to SEZs would be placed before (it) for direction”.

The ministers, who are also working out a new rehabilitation policy, are expected to put state governments’ SEZ proposals on hold till the package for landlosers is drawn up.

The SEZ rules, which grant tax benefits only to the developers, may see another change. “In the proposed amendments, even co-developers and contractors and sub-contractors will be given the tax concessions,” Pillai said.

The controversy over land has slowed down the process of granting clearances. Since October, no new SEZs have been approved, and meetings of the Board of Approval have been postponed twice this month.

Pillai, however, said that in each of the 80 cases that were to come up in the board’s January meetings, the developers had tied up land.

He added that so far, 63 SEZs have been notified and investments worth Rs 11,000 crore received since the act was implemented. At its last meeting in August, the EGoM had removed the cap of 150 on the number of SEZs.

On October 6, the board had given in-principle approval to eight SEZs in Bengal, two of them proposed by the Salim Group. One is a chemical hub on a 4,000-acre plot at Nandigram and the other a multi-product SEZ on 5,000 acres in Haldia.

The rest includes three from the Videocon group and one each from Salarpuria Properties, SREI and SEZ Infrastructure Developers.

Videocon Realty and Infrastructure Ltd received clearance for a 144-acre electronic and IT hardware SEZ at Suryapur in North 24-Parganas, a 1,000-acre multi-product SEZ in Howrah and another multi-product SEZ in Kharagpur.

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