PRIVATE DEVELOPERS NEED TO BUY 70% LAND FOR SEZS

PRIVATE DEVELOPERS NEED TO BUY 70% LAND FOR SEZS
Chennai, August 10, 2008
The Economic Times

The policy framework of special economic zones (SEZs) are getting tweaked to meet the aspirations of all stakeholders. One of the latest regulations on the anvil pertains to land acquisitions.

Following the recommendation by an Empowered Group of Ministers (EGoM), private developers should buy 70 % of the land at prevailing market prices with government acquiring the rest, said R Gopalan, additional secretary, union commerce ministry.

Stating that a number of changes are being made in the rules relating to the land acquisition for SEZs, he said a suggestion has been mooted to place a cap on prime agricultural land bought for the SEZs.

Gopalan was in Chennai on Friday for honouring SEZ developers and export-oriented units for their outstanding performance. The meeting was organised by the commerce ministry and the Madras Export Processing Zone SEZ (MEPZ-SEZ).

SEZ Developers, who got awards for 2007-08, were Nokia India, Mahindra World City, SIPCOT-SEZ and Flextronics Technology.

Export Award winners included Linea Fashions, Ambattur Clothing, Orchid Chemicals, Polyhose, Shasun Chemicals, Igarashi Motors, Magic Wood, Nokia Telecom, Infosys, Covansys, Syntel, Tata Coffee, Sterlite and Nestle India. He said the changes, aimed at ensuring fair valuation, are expected to be passed by the winter session of Parliament, along with the amendments to the Land Acquisition Act, which is now before a standing committee.

For about a year now, the Centre has been working on putting in place a single-window system of clearance for SEZ developers. A single-member committee, at the chief secretary level, could report through the development commissioner on the unit approvals, which are now facing several procedural wrangles, Gopalan said. At the EGoM meet on Thursday, it was decided that the current fiscal incentives to SEZs and land ceilings and other rules would continue, he said.

Endorsing the view, MEPZ-SEZ development commissioner B Vijayan said as a small step to initiate faster clearances for SEZ units, Elcot has been identified as a single window for IT-SEZs. The state has one of the best track records in the speedy implementation of SEZs, he added. Highlighting the performance of the SEZs, Vijayan said that seven out of eight units, which had the letter of approvals, had started operations. In Oragadam, six out of eight LoAs were expected to go on-stream by October. SIPCOT is the biggest landlord in Tamil Nadu, he added.

ETL, ETA, DLF, TCS, Hexaware, Shriram Properties and Elcot Sholinganalur I were already operational while half-a-dozen are scheduled to become in the current fiscal, Vijayan said.

Earlier, at the award function organised by the MEPZ-SEZ, Gopalan said SEZs were the key to increasing India’s share of global trade, which currently stood at $200 billion.

SEZs could help to boost the foreign trade share to 5% by 2015 from the current share of 1.5%, he said. Gopalan also flagged a specific issue of skill development from the perspective of SEZs. Apart from corporate social responsibility, the onus of creating a talent reservoir lay with them, he said, urging the SEZs to interact with the government through the development commissioners.

While a stable policy regime would continue for SEZs, he said they must be allowed to run for five years before any alterations are made. SEZs have generated 2.5 lakh direct employment opportunities and new investments of about Rs 74,000 crore.