SEZ SCAM: SEZs not state’s best ind’l policy

Mumbai: At least 7,500 hectares of land, acquired originally for setting up special economic zones (SEZs), could be utilized for commercial and residential activity. The area is equivalent to nearly six Aarey Milk colonies.

A day after the state cabinet cleared the state’s new industrial policy, controversy surrounding an exit clause meant for denotified SEZs continues to cloud other new initiatives. The exit clause was introduced as quite a few SEZs in the state have already notified or withdrawn and there is a possibility of many others opting out following the central government’s move to levy new taxes in SEZ areas.

Only 17 of the 146 SEZs originally notified in the state have taken off so far. The exit clause has attracted controversy for allowing commercial and residential development on 40% of land acquired for the SEZ in cases where these were privately acquired, or are jointly promoted by CIDCO and MIDC with a private partner.

EXIT CLAUSE ROW
• The state will allow commercial/residential development of 40% of privately acquired land for denotified SEZs
• Exit clause introduced in view of high drop-out of SEZs; only 17 of 146 SEZs have taken off so far
• NCP privately criticizes policy. CM defends it, says condition now more stringent

CM defends exit clause, concerns over misuse
Mumbai: While chief minister Prithiviraj Chavan and industries minister Narayan Rane defended the exit clause for SEZs in the industrial policy and termed it a “path-breaking initiative”, concerns over its misuse are being raised even in government circles.

About 55% land acquired in the state for SEZs that have not taken off (16,000 out of 29,000 hectares) has been privately acquired, said the state officials. Besides, another 2,797 hectares have been acquired by MIDC for Bharat Forge SEZ in Khed and India Bulls SEZ in Sinnar, where it enjoys sweat equity of 26%. Cidco has a similar role in the Reliance-led Navi Mumbai SEZ.

The Confederation of Indian Industry (CII) has welcomed the new policy.

Senior ministers from the NCP camp had reportedly objected to the commercial and residential development clause at the cabinet meeting. Even as Rane denied it on Thursday, a senior NCP minister confirmed this. Talks of a rift in the Congress and NCP over the clause gained ground with deputy chief minister Ajit Pawar skipping a news meet on Thursday. But Rane clarified Pawar could not make it to the event as he was meeting a foreign delegation.

Chavan said the government had only imposed a more stringent condition on the SEZ developer. “The SEZ rules, 2006, stipulate that a developer must undertake industrial development on 50% of the acquired land. We have now increased it to 60%,” he said. He added the exit clause allowed conversion of the SEZs into integrated industrial areas, which would make the “walk to work” concept feasible.

The policy states about 10% land could be used for commercial development, while 30% could be used for apartments and facilities like schools, colleges, recreation grounds. CM said the IIAs would facilitate development of “self contained industrial townships.”

But the policy is silent on the nature of residential and allied development. “Special DCRs will be formed,” an official said. Separate cabinet approval will have to be taken for the conversion of the Navi Mumbai SEZ to IIA, Rane clarified on Thursday.

Both Rane and Chavan invited the media’s wrath when they accused it of running a misinformation campaign. Chavan even accused the press of “motivated” reportage of the cabinet meet. Sources said their veiled target was the Congress’s ally, the NCP. Spokesperson fpr NCP Nawab Malik said on Thursday the party was not opposed to the policy and that the views of some party ministers were “personal” in nature. The policy will come into force from April 1. The announcement comes days before “Vibrant Gujarat” investment summit.

NEW POLICY PROMISES
• Denotified SEZs to be converted into integrated industrial areas
• Additional 0.5 FSI for industries in MIDC areas on payment of a premium
• Accelerate growth in the manufacturing sector, bring Rs 5L crore investment and 20 lakh new jobs in 5 years
• Customized incentive packages for investments of over Rs 1,500 cr
• Increased fiscal incentives for investment in lesser developed areas
• Increased fiscal incentives and support to medium, small and micro enterprises
• Special cell to be set up for investor facilitation
• Single-window clearance system to be adopted

Courtesy:
Sandeep Ashar TNN
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