Even in the midst of a liquidity crunch, Special Economic Zones still remain a lucrative investment option among developers. The government on Monday cleared 22 of these tax-free industrial enclaves.
Approaches Morgan Stanley, GIC and Blackstone
Two multi-product SEZ projects promoted by Reliance Industries' Chief Mukesh Ambani and the Tatas are among others that would come up for clearance at the meeting of the Board of Approvals in New Delhi on Thursday.
The Reliance Industries special economic zone at Jamnagar in Gujarat, which had been given a sector-specific status (petroleum and petro-chemicals) earlier, was today modified to a multi-product zone by the board of approval, which met in New Delhi.
The applications for seeking withdrawal of approvals and extension of validity of clearances will be considered by the board of approvals in the commerce ministry in its meeting on October 5. Those seeking extension of time include Mumbai SEZ, promoted by Reliance Industries' Chairman Mukesh Ambani and his close aide Anand Jain, Gitanjali Gems, Jubliant Infrastructure and L&T Hitech City, an official said.
The meeting of the empowered group of ministers on special economic zones could not reach any firm view on on Monday while the government will take the rehabilitation policy to the Cabinet next month.
The Board of approval in the commerce ministry took these decisions along with approving two fresh proposals of Shyam Steel Industries and Limitless Properties in West Bengal and Tamil Nadu, respectively. The BoA also ratified extension of time to 23 developers, including Satyam Computer Services, for implementing tax-free enclaves in the wake of economic slowdown.
The Tatas maybe facing an uphill task getting their small car project in Singur started, but the group's ambitious special economic zone at Gopalpur in Orissa is soon set for launch sans any land acquisition problems.
The officials also said that the ministry of commerce and industry had recommended the Maharashtra government to take back the land acquisition notification that it had issued. The zone has been given in-principle approval by the BoA, as RIL is yet to acquire the requisite land.
The government has broadened the ambit of services exempted from service tax for Special Economic Zones as services provided to these zones even from outside would not be taxable.
Mumbai-based Akruti Nirman said on Tuesday it has sought approval from the Board of Approval to set-up three special economic zones, one in Mumbai and two rest in Pune.
Senior officials from different ministries, including finance, home affairs and defence, would be attending the meeting. The last BOA held on August 11 had allowed Maytas Ventures, promoted by the disgraced former Satyam chairman B Ramalinga Raju's son, to surrender its biotech SEZ and approved three new proposals, including that of Brooke Bond Real Estates IT/ITES tax-free enclave in Karnataka.
The market capitalisation of Adani Group companies rose by nearly Rs 73,000 crore on Monday as investors lapped up shares of the power-to-port conglomerate after BJP's electoral wins in three states, spurring hopes of regime continuity at the Centre. The Gautam Adani group's market map once again neared the Rs 12-trillion mark, following sharp gains made over the past week. "Two big overhangs for the Adani Group have receded somewhat following the state election results, there is more certainty that the BJP will win a third time next year.
According to the revised DTC draft, which will replace the Income Tax Act of 1961, tax exemptions for SEZs will be confined to the existing units.
The government on Friday the proposals of telecom giants Motorola and Foxconn, and Singapore-based reality major Ascendas to join as partners in the Special Economic Zones coming up near Chennai.
The Board of Approval on Tuesday cleared 10 special economic zone proposals, including three Mukesh Ambani-promoted IT zones in Navi Mumbai.
The commerce ministry had, in March, put on hold this change in the SEZ rules.
The Centre has asked the Maharashtra government to reduce the size of the Reliance Industries-promoted Mahamumbai SEZ as it involves acquisition of over 10,000 hectares of land.
The board of approval, headed by commerce secretary G K Pillai, will also consider requests from realty major DLF for de-notification of its IT-ITeS SEZs in Gujarat, Haryana, West Bengal and Orissa. Larsen and Toubro has proposed to set up an IT SEZ in Mumbai, while Gulf Oil Corporation has moved application for a similar tax-free zone in Bangalore.
New applicants for Special Economic Zones (SEZ) would have to wait for up to a year before their cases are considered by the Board of Approvals (BoA).
Mumbai-based Zoom Developers, engaged in diversified businesses including real estate, plans to invest Rs 1,000 crore (Rs 10 billion) in the next three years to construct a 100 hectare IT-ITeS special economic zone at Indore.
Board of Approval has asked the Goa government to compensate the denotified developers over the SEZ issue.
However, the board of approval in the commerce ministry asked the DLF to return all the tax sops it had taken from the Centre before its SEZs in Gujarat, West Bengal, Orissa and Haryana could be denotified. The BoA, headed by commerce secretary G K Pillai, also allowed more time to the K Raheja group to build its tax-free zones in Goa, Hyderabad and Navi Mumbai, an official said.
Bihar does not figure at all in the list of SEZs that have been given either formal or in-principle clearance by the board of approval. In sharp contrast, the Board has cleared a total of 550 proposals across 20 major states.
Three special economic zones promoted by Reliance Industries chairman Mukesh Ambani and his close aide Anand Jain in the same area have been listed for clearance on Friday.
BoA has given formal approval to 15 special economic zones, including those of TCS and Cognizant, and in-principle nod to five, Commerce Secretary and BoA Chairman G K Pillai told reporters after the meeting in New Delhi.
SEZ developers have been facing problems in setting up their projects as they have to take permissions from state authorities for master plan and environment at different levels.
Goa has scrapped 12 SEZs, including the seven, which were approved by the state government. But the government is struggling over denotification of three industrial enclaves, which has now rushed to the High Court against government's intention to scrap them.
Diversified group Mahindra and Mahindra will set up its third Special Economic Zone at Pune, which is likely to see investments of Rs 9,000 crore (Rs 90 billion).
Undaunted by criticism by a Parliamentary panel, the government cleared 28 fresh special economic zone proposals on Thursday, including the Navi Mumbai promoted by Reliance Industries Chairman Mukesh Ambani.
Indian Petrochemicals Corporation Ltd employees affiliated to three separate unions in Vadodra will go on a mass protest on Tuesday against the proposed transfer of some of them to Reliance Industries' SEZ in Jamnagar.
Newly-elected president of industry body Assocham and Videocon chief Venugopal Dhoot on Tuesday said he was against "land grabbing" in the name of SEZs
The other two denotification routes are amendment of the SEZ Act through Parliament and through a presidential ordinance. The latter has been ruled out since Parliament is in session and there is nothing to stop the developers of the three SEZs from going to court if the government waits for the session to end. An amendment of the SEZ Act will not only need approval from the Commerce Ministry, but may also provoke political opposition from the Congress itself.
The Rs 56,000-crore (Rs 560 billion) Adani Group on Monday received a major blow from the Gujarat High Court, which ordered a shutdown of 12 units in Adani Ports and Special Economic Zone (APSEZ), located in Mundra, Kutch district, with immediate effect.
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