The Telegraph
Monday , January 7 , 2013
Since 1st March, 1999
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Clutch of sops for SEZs on the cards

New Delhi, Jan. 6: The government will soon issue new norms to revive special economic zones (SEZs). Among the measures being considered are reducing the minimum land area required to set up the tax-free zones and extending benefits of export schemes to SEZ units.

“A set of new SEZ guidelines, which will boost investments in these zones, will be issued later this month. Final touches are being given to them after several rounds of discussions with the finance ministry,” a senior commerce ministry official said.

Officials said “the changes would help these zones become infrastructure-driven and not tax exemption-driven”.

The new guidelines would try to address some of the concerns of investors.

With land acquisition being a major hurdle, the ministry plans to reduce the threshold limit for different categories of SEZs. It plans to reduce the minimum area required for multi-product zones from 1,000 hectares to 250 hectares; and for multi-services/sector-specific SEZs from 100 hectares to 40 hectares.

The contiguity norm will apply only to processing units where manufacturing and exports take place.

Under the existing norms, a plot of land is not considered continuous if a railway line or a waterway or power cable passes through it.

Officials said changes in norms for building schools, residential complex, hospitals and shopping area were also being considered. Under the present guidelines, they have to be present within the zone.

The government is also planning incentives for developers who want to set up SEZs in remote and undeveloped areas.

The other big change in the pipeline is extending the benefits of export schemes. The export benefits announced in the foreign trade policy include a 2 per cent interest discount for sectors such as toys, sports goods, processed agricultural products and readymade garment, apart from SMEs and handloom.

The focus product and focus market schemes, under which the government gives cash incentives equivalent to 2 per cent of the value of exports, were also expanded to 10 new markets and over 100 new products.

Exports from SEZs grew 36 per cent year-on-year to Rs 2.39 lakh crore during April-September this fiscal year. Overseas shipments from SEZs stood at Rs 3.65 lakh crore in 2011-12.