Reliance Industries’ Chairman Mukesh Ambani’s pet project to set up a Special Economic Zone in Navi Mumbai might finally face the axe when the Board of Approval (BoA) on SEZs meets on Friday. As many as 57 proposals face the possibility of cancellation of earlier approvals.
Navi Mumbai SEZ (NMSEZ) is jointly owned by Ambani and his aide, Anand Jain of Jai Corp, SKIL Infrastructure and the City and Industrial Development Corporation, a state government arm. NMSEZ approached the previous government at the Centre for setting up a multi-product SEZ over 1,250 hectares at Dronagiri in Maharashtra in 2006. This was approved in 2007.
Since then, not a single unit has come up there. However, it was able to obtain a series of approval extensions, normally valid only for three years, to well beyond the sixth year.
Initially, the proposal could not meet the contiguity requirement. As a result, NMSEZ was broken into four nodes – Dronagiri, Kalamboli and Ulwe (airport and waterfront). Then, the proposal got mired in financial difficulties, due to the global crisis and its aftermath, from 2008. It did get some interest from investors but due to imposition of Minimum Alternate Tax (MAT) on SEZs, these could not materialise.
“The developer vide letter dated November 11, 2014, has informed that they are not interested in implementation of the SEZ. Accordingly, DC (development commissioner) has recommended for cancellation of formal approval,” says a note by the commerce department. Some of the other prominent proposals that might face cancellation of earlier approvals are by Parsvanath, Delhi Metro Rail Corporation, DLF Commercial Developers, Gujarat Industrial Development Corporation and JSW.
The government at the Centre, after coming to power last year, has already cancelled 67 SEZs. According to the Union comtroller and auditor-general, Rs 83,000 crore in revenue has been lost over six years on account of SEZs.
The commerce ministry, in its Budget proposals, has urged removal of MAT and dividend distribution tax for SEZ developers. Presently, there are 491 SEZs, of which 352 have been notified. A total of 196 are presently operational and exporting.
Exports from SEZs increased from Rs 22,840 crore in 2005-06 to Rs 4.94 lakh crore in 2013-14, according to official data.
This meeting of the BoA, to be chaired by the commerce secretary, was to have taken place last November.
