IT ministry joins row on SEZ norms

Maran wants tier-III classification of IT SEZs to go.

It is not just the commerce and finance ministries that are clashing over the norms for special economic zones.

Communication and Information Technology Minister Dayanidhi Maran has written to Defence Minister Pranab Mukherjee, who heads the empowered ministerial group on SEZs, to remove the tier-III classification for IT SEZs.

In his response to the circulated minutes of the meeting, the minister said the tier-III classification should be replaced with the words "rest of India" since restricting IT SEZs to tier-III cities gave an impression that these could not be set up in rural areas.

Maran urged Mukherjee to ensure an early resolution of the continuation of tax benefits to software technology parks. He indicated that the finance ministry had said at the last meeting of the group of ministers that it would separately consider the proposal to extend tax holidays beyond 2009 for a five-year period.

The group of ministers had stipulated that there would be no area restriction on SEZs. Instead, there would be a built-up area criteria of 1 million sq ft for tier-I cities, 500,000 lakh sq ft for tier-II cities and 250,000 lakh sq ft for tier-III cities.

Maran agreed with the commerce ministry that the inclusion of an employment-criteria for IT SEZs was a concern. He said employment should only be a guiding principle and not a mandatory clause since it was not possible for units to monitor it.

The commerce ministry had objected to the inclusion of employment criteria in the circulated minutes since no decision to this effect was taken by the ministerial group.