Union Minister schlepps in major SEZ reforms
Special Economic Zones (SEZ) and consequently, commercial development, are scheduled to recieve encouragement from the lowering of the minimum land area requirement by the Ministry of Commerce late April.
Union Minister for Commerce, Industry and Textiles – Anand Sharma, announced reforms to the SEZ Policy during the release of the Annual Supplement 2013-14 to the Foreign Trade Policy 2009-14 on April 18. The reforms to the SEZ Policy were created to revive investor interest in SEZ’s.
Currently, 170 of the 389 notified SEZs are functional. Over one million people are employed by these 170 SEZs. Investments amounting to over Rs 2.36 lakh crores has been made in SEZs. In, 2012 SEZs exports registered a growth of over 31 percent over the previous year financial year of 2011.
The Minimum Land Area Requirement was reduced by half for different categories of SEZs. The reduction was made because of the difficulties in aggregating large tracts of un-cultivable land which is contiguous and vacant.
The Minimum Land Area Requirement for a multi-product SEZ has been mowed down to 500 hectares from 1,000 hectares; while the 100 hectares required for sector-specific SEZs has been minimized to 50 hectares.
Furthermore, it was decided that there wouldn’t be any norms regarding the minimum land requirement for establishing either IT or ITeS SEZs. The decision was made because, a significant contribution towards the export promotion comes from IT/ITeS SEZs.
However, the criteria of minimum built-up area still needs to be met by SEZ developers. The requirements for the Minimum built-up area is considerably relaxed. For the seven major cities – Chennai, Bangalore, Delhi (NCR), Hyderabad, Kolkata, Mumbai and Pune the requirement of one lakh square meters is applicable. The minimum built-up area for Class B cities is 50,000 square meters.
According to leading industry experts, Ministry for Commerce, Industry and Textiles’s plan of action is a definite reformer. Encouraging the SEZ would in turn lead to improvement in infrastructure, easing of congestion from the central parts of the city and ultimately a growth in the real estate market, especially the micro markets.
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Reduction of Minimum Land Area Requirement and move to recognize the contribution from IT or ITeS SEZs are good initiatives.
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