SIZ & not SEZ in J&K: Panel

Sensing trouble and strong opposition from the farmers and people as happened in West Bengal, UP and some other states, the Jammu and Kashmir government has proposed to create Special industrial zones (SIZ) instead of special economic zones (SEZ).

A high level committee of the state government formulated for the purpose, has forwarded a proposal to the Centre to create SIZ in Jammu and Kashmir with the initial funding of Rs 200 crore.

The new idea has been conceived by the Azad government in the wake of the recent protests. The government wants to invite investments in the tourism sector at Gulmarg in Kashmir.

The committee said, " What Jammu and Kasmir needs is a big banner initiative, one that will raise profile of the state among potential investors. Best option in this regard is the SEZ. However, the SEZ's viablity is doubtful given the state's land locked location, infrastructural deficit and distance from posts. Therefore, what Jammu and Kashmir should attempt is SIZ," the panel recommended.

Justifying the point, the committee argued that SIZ will have all physical attributes and governance structures of the SEZ but not necessarily their fiscal and statutory dimensions.

The panel has pointed out that the Central budget 2007-08 has extended Income Tax and Central Excise exemption for investments in Jammu and Kashmir up to 2012. The similar concession will be available in the Uttrakhand and Himachal only up to 2010.

It suggested that Jammu and Kashmir must actively woo big industrial houses. It also suggested revival of industrial estates here, as many of them need immediate comprehensive maintenance and upgrade.

Like the SEZ, the SIZ too will be a large area with world class infrastructure, captive power generation and distribution, high quality services and utilities, dedicated infrastructure facilities, fast track and single window clearances and to the extent possible liberalised labour laws, committe said.

The committee further proposed that units in the SIZ will have neither tax concessions nor export obligations. They will be free to sell the goods in the country or export outside.

It is of the view that the SIZ is a model that other states too can adopt. But it is particularly appropriate for Jammu and Kashmir as the SIZ will make it possible to ring fence the zone in a physical sense protecting it against the security threats.

The panel has pointed out that the Central budget 2007-08 has extended Income Tax and Central Excise exemption for investments in Jammu and Kashmir up to 2012. The similar concession will be available in the Uttrakhand and Himachal only up to 2010.