Maharashtra government to review SEZ policy

Factors that led to withdrawals of some special economic zones under scanner

Special economic zones (SEZs) in Maharashtra might have a long wait ahead, as the state government has embarked upon a long review of the policy under which these were developed.

The review would also analyse what factors led to the withdrawal or cancellation of some SEZs and what is the way out for the sustainable development and revival of some of them.

State Industries Minister Subhash Desai told Business Standard: “As on date, 24 SEZs with a total investment of Rs 18,786 crore are operational. As the state has adopted the SEZ policy with effect from February 2006, in all 236 SEZ, proposals were received till December 2014. Of these, 124 SEZs were approved by the central government (formal approval 104 and in-principle approval of 20) and 66 of them are notified. However, some of the SEZs could not take off due to the change in the policy by the Centre. Besides, there were tax-related issues.”

Desai admitted development of some of the SEZs was also hampered due to the issues relating to the land acquisition and compensation to the project-affected persons. “The government is at present engaged in talks with the SEZ developers and various farmer organisations to settle land acquisition-related issues.”

The minister also said the state government would examine a slew of incentives announced by the National Democratic Alliance government in the New Trade Policy released last week. He was referring to the Centre’s decision to extend export inventive schemes for both goods and services to units in SEZs also in the new trade policy. This apart, total revenue forgone by way of Merchandise Export from India Scheme and Serve from India Scheme (SFIS) sops to SEZ units are likely to be within Rs 500-2,500 crore.

He said the government would convey its views to the Centre to bring in more clarity on issues with regard to taxes and land acquisition.

A industry ministry official, who did not want to be named, said further clarity is needed on whether or not SFIS benefits will really be given to SEZs and what is the Centre’s stand on minimum alternate tax and dividend distribution tax.

The official said of the 124 approved SEZs in the state, 23 were de-notified or withdrawn. Those were supposed to come up on a total land of 1,713 hectare. There has been a loss of Rs 18,444 crore.