No takers for SEZs? 62 projects may be scrapped as developers lose interest

Exports from SEZs grew nearly 12% to Rs 5.24 lakh crore in 2016-17

The commerce ministry is likely to cancel approvals of as many as 62 special economic zones including Cochin Port Trust as the developers have not shown interest in moving forward with the projects.

The Board of Approval (BoA), headed by Commerce Secretary Rita Teaotia, would consider cancellation of these proposals at its meeting on July 3.

The board deals with issues related to special economic zones (SEZs).

According to the agenda note of the board's meeting, the developers have not requested for extension of their letter of approval (LoA), under which they can seek more time to execute their projects.

 

"As such it seems that the developers are not interested in the projects. The matter is placed before the BoA for further directions," the agenda said.

It said that Cochin Port Trust, which had planned to set up Free Trade and Warehousing Zones (FTWZ) in Kerala, has expressed its inability to proceed with the project. The development commissioner of Cochin Special Economic Zone has recommended for cancellation of this project.

Similarly, Delhi State Industrial & Infrastructure Development Corporation, Lark Projects, Mansarovar Industrial Development Corporation and Diamond IT Infracon have neither applied for LoA nor for notification of SEZ.

Development Commissioner of Noida Special Economic Zone has also suggested for cancellation of these projects.

The numbers reflect the erosion of investor interest in these zones, which once emerged as export hubs. In all these cases, formal approvals had been granted.

SEZs, which emerged as major export hubs in the country, started loosing sheen after imposition of minimum alternate tax (MAT) and dividend distribution tax (DDT).

To revive investor sentiment, the commerce ministry has taken certain steps.

Exports from SEZs grew nearly 12 per cent to Rs 5.24 lakh crore in 2016-17.

Data showed that as on March 31, SEZs have attracted investments worth Rs 4.23 lakh crore and generated employment for 17.31 lakh people.

States like Tamil Nadu, Karnataka, Telangana and Maharashtra are home to the highest number of operational SEZs.

Till May 1, the government has approved as many as 421 zones, of which 218 are operational.