60 percent land still lying empty under UPA’s SEZ Scheme
An analyst says that the UPA government’s special economic zone (SEZ) scheme whose aim is to create infrastructure to facilitate exports appears to have failed.
More than 60 percent of the total land under the SEZs is vacant years after the scheme launched in 2006. Till now the government has notified 389 SEZs. As per the data collected by the ministry of commerce, out of the total 47,803 hectares of SEZ land notified, only 17,689 or 37 percent of the total land has been utilized till now. Only 185 out of 389 notified units are functional, defined as at least one working export unit.
Mr. Anand Sharma, Commerce and industry minister says that in an internal meeting they had showed concern over the huge gap between notified and operational SEZs and asked officials to fill this gap.
An official from commerce department says that there are some developers who are not doing activity on the land and the department is planning to send them show-cause notices for asking the reason of why they are not doing any work on the land.
The land was allotted to the developers by the state government and if SEZs is de-notified, the states would have to take decision on the use of land.
It will take three years to become operational which makes up at least one unit functional. They are applying for the extension to the board. The official says that the department has gathered data for each SEZ and each SEZs will be analyzed separately.
The official also added that most of the notified SEZs don’t have complete approval whereas others are in the way of setting up infrastructure before units can establish. In other cases the units are not coming in.
So many approvals are in waiting because of problems like environmental clearance. Another major problem is modification in tax laws.
The former finance minister Mr. Pranab Mukherjee mandated a minimum tax of 18.5 percent on the profits of SEZ developers and units located in such zones in 2011-12, which witnessed a strong opposition. The actual method provided for a complete tax relaxation for SEZs consists of exemption from MAT and dividend distribution tax. After this, these units still gets 100 percent income tax relief on export income for the first five years and 50 percent for the next five years.
Source: The Economic Times
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