The government will dish out its revamped policy to revitalize special economic zones (SEZs) as early as next month.
Commerce ministry indicated that the new guidelines would resolve niggling issues such as reduction of land holdings and imposition of taxes in these incentive zones.
“The new guidelines will be out next month. Most issues will be resolved,” said JK Dadoo, joint secretary in commerce ministry. Indian SEZs started losing sheen after the government imposed minimum alternative tax (MAT) and dividend distribution tax on SEZs in 2011.
Moreover, information technology (IT) companies have demanded that the minimum size of an
SEZ be reduced from 10 hectares citing non-availability of land holdings of that size. Finance ministry had objected to the demand saying that it would lead to proliferation of such zones and consequent loss of revenue. Single product SEZs like IT and ITeS companies require a minimum size of 10 hectares while it is 1000 hectares for multi-product SEZs.
Senior officials from the commerce ministry have previously indicated their unhappiness over the performance of SEZs.
Till date, government has approved 589 SEZs out of which 389 are notified and just 153 are operational with total number of 3,400 operational units. While government granted formal approval to just two SEZs last year taking the total number to 589 as compared to seven approvals in 2010-11 and 356 approvals in 2009-10 and there were just 10 new SEZs getting operational last year taking the total count to 153.
According to the Export Promotion Council for SEZs, exports from SEZs went up by just 15.4 per cent in 2011-12 at Rs 3,64,478 core as against a growth of 43.1 per cent in 2010-11 (Rs 3,15,868 crore) and 121.4 per cent in 2009-10 (Rs 2,20,711 crore).
However, export growth in 2009-10 had been exceptionally higher because of a very low base in 2008-09 after the financial meltdown in US virtually dried up demand for goods made in India.
Source : mydigitalfc.com