Govt may cap number of IT SEZs

Except for a probable cap on the total number of Special Economic Zones (SEZ) in the information technology sector, the UPA regime will not entertain any demand of the Left allies seeking amendments in the SEZ Act and Rules in the forthcoming winter session of Parliament.

As for the endless debate on the revenue loss through tax concessions in SEZs, the Ministry of Commerce has decided to commission a study on it by an independent organisation.

The study report will be out in the next three to six months, Commerce Secretary GK Pillai said at a conclave on SEZs organised by Assocham here today.

Although the government had not taken a decision to put a cap on IT SEZs, the Board of Approvals was of the view that the existing 148 SEZs in this sector were enough for the time being and, therefore, there would be no more in-principle approval of IT SEZs, said Pillai. Formal approval, however, can be given if a group that has already been granted in-principle approval comes up with the land.

The Left parties' contention on sector-wise caps on SEZs did not hold the ground because the small number of SEZs in other sectors still left much potential untapped-- only textile and pharma SEZs were in double digits (13 each), he said.

According to the commerce secretary, the existing strength of IT SEZs can employ 12.5 lakh people: "Are you anticipating 12.5 lakh people to move into IT SEZs in the next three years?"

The Left parties had earlier demanded from the government adoption of the West Bengal model of SEZs providing for at least 50 per cent minimum processing area. Pillai said that as per the Urban Development Act, minimum processing area could not be increased beyond 35 per cent.

Pillai also rejected the Left's contention, put forward by CPI national secretary D Raja, that SEZs have been exempted from operation of labour laws.

Except the Customs Act, all other laws including labour laws are applicable in SEZs. A study committee of Parliament is at present visiting SEZs and according to them, working conditions in SEZs were quite reasonable.

Addressing Raja's demand to give land on lease instead of selling it to developers, Pillai said most of the state governments were giving land only on lease .

He said the Board of Approvals had earlier given clearance for 237 SEZs (involving 34,510 hectares of land) of which 41 had been notified with an investment of over Rs 5,000 crore in the past seven months.

The Board had also given in principle clearance for additional 166 SEZs for which ground work was being undertaken by their developers.

In the 237 SEZs, the titles for 17,800 hectares of land are with private parties, while the remaining land is with industrial development corporations.