Nath seeks review of cap on SEZs

With as many as 200 fresh proposals for setting up special economic zones having been submitted, Commerce and Industry Minister Kamal Nath has written to Prime Minister Manmohan Singh seeking an "urgent need to review" the cap of 150 zones for the country.

The empowered Group of Ministers (GoM), headed by Defence Minister Pranab Mukherjee, is scheduled to meet next week to decide the future course of action.

The pending proposals involved a potential investment of at least $5 billion, government officials told Business Standard.

They added that Nath's letter, written last week, had highlighted that the approval of more zones would generate direct employment for at least 5 lakh people, and indirect employment for around 10 lakh.

The ministry has prepared a similar note for the consideration of the empowered GoM. The decision to initially limit the number of zones to 150 was taken by the empowered GoM on SEZs.

Officials said the minister had stressed in his letter the urgent need to review the cap, since approving these proposals now would ensure that the proposed investments came in over the next two-three years.

Some of the cases pending before the Board of Approval (BoA) include South Korean company Posco's proposal for an SEZ in Orissa, and Indonesian company Salem's proposal for setting up a zone in West Bengal.

The officials pointed out that the 150 approved zones had committed investments worth $ 6 billion, and promised to generate direct employment for around 5 lakh, and indirect employment for another million.

In addition to lifting the cap, the commerce ministry is also in favour of undertaking a progress review of the cases approved every three months. The officials said the review would be more in the nature of gathering of information by the BoA.

"There would be several parameters that would be reviewed; for instance, possession of land, construction on land, including availability of water and electricity, completion certificate of the zone, including possession to individual units," they added.