A key meeting of senior United Progressive Alliance government ministers and political parties, including the Congress and its Left allies, failed to secure a political consensus on the showpiece Special Economic Zones initiative.
The extent of disillusionment can be gauged from the fact that even tax sops for units in the SEZs could not help revive the dampening spirit. The year has seen a change in the sentiment, which has turned for the worse in the last three-four months. Scores of big corporate houses were making a beeline for developing special economic zones, billed as the new investment destination that assured tax-free income.
Adani Ports and Special Economic Zone Ltd (APSEZ) on Tuesday announced the acquisition of a 95 per cent stake in Gopalpur Ports in Odisha from Shapoorji Pallonji Group and Orissa Stevedores Ltd at an equity value of Rs 1,349 crore. In Gopalpur Ports, Shapoorji Pallonji Group (SP Group) firm SP Port Maintenance Pvt Ltd has a 56 per cent stake and Orissa Stevedores Ltd (OSL) has a 44 per cent stake. Gopalpur Port is an all-weather deep-water berthing port with a capacity of 20 million tonnes per annum (MTPA) situated in Ganjam district of Odisha.
Christopher Wood, global head of equity strategy at Jefferies has rejigged his equity portfolios. In his Asia ex-Japan long-only portfolio, he has added Axis Bank (5 per cent weightage) and increased holding in Larsen & Toubro (L&T) by one percentage point. This, Wood said, will be paid for by removing the investment in ICICI Lombard General Insurance and reducing the investments in HDFC Bank and Reliance Industries (RIL) by one percentage point each.
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.
Mahindra & Mahindra Ltd on Thursday announced its plans to set up a special economic zone at Jaipur entailing an investment of $2 billion.
The Board of Approvals on Wednesday gave final clearance to 15 Special Economic Zones but deferred a decision on the Navi Mumbai zone promoted by Reliance Industries chief Mukesh Ambani and Anand Jain.
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 Adani group stocks continued to remain under pressure on Friday, falling up to 20 per cent in morning trade, after the US-based investment research firm Hindenburg Research made damaging allegations. Shares of Adani Total Gas plummeted 19.65 per cent, Adani Transmission tumbled 19 per cent, Adani Green Energy plunged 15.50 per cent and Adani Enterprises tanked 6.19 per cent on the BSE. Also, Adani Ports and Special Economic Zone fell 5.31 per cent, Adani Wilmar dipped 5 per cent and Adani Power declined 4.99 per cent.
Land acquisition for special economic zones is stuck because of a year-old directive by the Empowered Group of Ministers that bars state governments from carrying out compulsory acquisition of land for the zones.
The trouble is, in backward areas where infrastructure is weak, the impact of SEZ on access to water would be even more serious.
The government on Wednesday granted approval to Nokia, Wipro, Hewlett Packard, Reliance, Biocon, Ranbaxy Laboratories, Mahindra and Mahindra, Reliance energy and Adani Group's to set up Special Economic zones.
The proposal was mooted by the department of industrial policy and promotion in the ministry of commerce and industry.
Adani Ports and Special Economic Zone and Adani Green Energy are the other two Adani Group firms to have crossed the Rs 1-trillion mark in m-cap.
Commerce ministry will issue notices to 57 formally approved SEZs. If the notices are not replied to, the approvals will stand cancelled.
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.
While most other big companies like Tata, Mahindra and Reliance remain non-committal on FDI, Nikhil Gandhi was the lone voice supporting 51 per cent FDI through the automatic route.
The government is targeting export of goods and services worth $2 trillion by 2030.
The government has issued fresh guidelines allowing a power plant the fiscal exemptions of the Special Economic Zone if it is set up in the 'processing' area of the tax-free zone.
Even as Left parties have demanded a review of the tax concessions provided to SEZs, the DoT has sought extension of excise duty exemptions to industrial units set up in telecom-specific SEZs.
Real estate developer K Raheja Universal Private Ltd wants to scrap one of their notified special economic zones and also surrender a part of another zone, citing lack of demand from the information technology sector.
Seeking a faster roadmap for Special Economic Zones, Minister of Commerce and Industry Arun Jaitely said on Wednesday that the process of getting the zones ready should not face roadblocks.\n\n\n\n
The next six months may see the Centre notifying 100 special economic zones.
Reflecting the enthusiasm among private companies for setting up special economic zones, the board of approval for SEZs will consider over 100 proposals on March 17 - its first meeting since the implementation of SEZ Act and Rules last month.
This decision will come as a relief to Essar's multi-product port-based SEZ project in Hazira as well as of Adani Group's zone in Mundra, which the revenue department felt was not built on vacant land when it was notified, and hence it had violated the law. Both the zones are in Gujarat.
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.
For tapping high growth units in special economic zones, a host of Indian banks had established offshore banking units in 2003-04 in these duty free enclaves
The National Security Strategy document should flag all major issues concerning security strategy and provide guidelines to concerned departments to work out suitable action plans. Since the global and regional geopolitical canvas is dynamic, the NSS document should be deliberated at length before formulation and should be reviewed periodically, recommends Commodore Venugopal Menon (retd).
The demand relates to certain tax benefits on income from software development done overseas.
External Affairs Minister Pranab Mukherjee, who heads an Empowered Group of Ministers on Special Economic Zones, is likely to consult Prime Minister Manmohan Singh to resolve the dispute between finance and commerce ministries over tax exemption for export profits from the zones.
The government on Tuesday gave formal approval to the multi-services special economic zone of Mukesh Ambani- promoted Reliance Industries Limited in Gurgaon and in principle approval to the company's port-based SEZ in Rewas.
Notwithstanding the widespread protest against the proliferation of special economic zones in the country, the Ministry of Commerce and Industry is organising a seminar on the tax-free conclaves in Singapore on Wednesday in order to rope in global investors.
Infrastructure developer GMR Group plans to set up an airport-based special economic zone near the new Hyderabad International Airport, which it has the mandate to develop.
West Bengal on Wednesday decided to repeal the Special Economic Zone (SEZ) Act, 2003, clearing the road for other incentive schemes the Mamata Banerjee-led government is likely to announce over the next few weeks.
Gujarat Chief Minister Narendra Modi said on Thursday the vibrant western Indian state has become India's special economic zone, attracting both foreign and domestic investors.
And this time it is not just a question of taxes foregone.
As a part of its plan to decongest Mumbai and Navi Mumbai, the Maharashtra government proposes to develop a third city in Uran, 80 km away from Mumbai in the Raigad district.
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