In the previous fiscal, exports from the SEZs was Rs 99,689 crore (Rs 996.89 billion). Exports from Reliance Industries' Jamnagar refinery is likely to contribute substantially to the total shipments this fiscal, another official said.
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.
The administrative reforms commission has called for fewer special economic zones (SEZs), shorter tax holidays and sought a relook into the SEZ Act saying that the establishment of SEZs has become a source of conflict frequently leading to violence.
"We are confident that the status quo will be there...the issue has been taken up at the highest level," additional secretary in the Commerce Ministry D K Mittal said.
The country's largest real estate player, DLF, on Friday said it has approached the government for surrendering four of its IT-ITeS notified special economic zones (SEZ).
Reliance Industries has said the outcome of the Maharashtra government referendum on Mukesh Ambani-promoted Raigad special economic zone cannot be seen going against the SEZ since the ballot was cast by 'so-called farmers' and not the genuine landowners. About 6,000 land-owners took part in a first of its kind referendum to ascertain whether farmers want to give their land for an SEZ.
The pro-SEZ lobby is claiming that the benefits of dam are going to be minimal for these villages as the irrigation department has already committed water for various other purposes. However, the anti-SEZ activists are claiming that enough water is still available in the dam to irrigate the land in 22 villages.
'A cursory glance at India's SEZs suggests they were not nearly as well located' as compared to China, it in its World Development Report 2009. It added that 'poor location is the main obstacle to success.' In 2007, SEZs were approved in the coastal states of Andhra Pradesh, Gujarat, Maharashtra and Tamil Nadu, as well as in the interior states of Haryana, Punjab and Rajasthan, the report said. 'Even in the coastal states, many SEZs are not along the coast,' it said.
Justifying its stand on scrapping of Special Economic Zones projects in Goa, the state government has said the Centre has the power to denotify those which are not operational within the stipulated timeframe.
A senior state government official said, "Reliance managed to buy the land through direct negotiations with farmers." The state government would forward the company's application to the Centre as soon as it came with an official proposal, he added.
The Board of Approval (BoA) on Special Economic Zones (SEZs), the apex decision-making body for such tax-free industrial enclaves, today approved a proposal to amalgamate three separate zones, effectively lifting the 5,000-hectare limit on such zones that the government imposed in 2007.
Ishaan Real Estate is an investment company that focuses on property development projects in southern and western India.
Dr Reddy's Laboratories is setting up two special economic zones -- one each at Hyderabad and Visakhapatnam in Andhra Pradesh.
Releasing a report of public hearings conducted in various SEZ areas in the state, a member of the group, Professor Shanmugam Velayutham of the Chennai-based Loyola College, said land for the purpose of SEZ was 'being acquired from farmers' and handed over to big business houses, at the 'expense of the former's livelihood.' There was a danger of some real estate mafia exploiting the situation to secure some land for their business.
For the first time since its inception in 2006, the Board of Approval on special economic zones in its next meeting in March will take up a proposal from a developer to merge these tax-free industrial enclaves for exports.
The revised draft of the Direct Taxes Code would now induce more and more companies to set up their units in the special economic zones before March 31, 2011 as the government has made it clear that it wants to do away with the present provision under which the companies enjoy a 15-year tax exemption.
Outward shipments from the government-owned SEZ in Kandla, Santacruz, Noida, Madras, Cochin, Falta and Vishakhapatnam grew by 16 per cent to Rs 45,777 crore (Rs 457.77 billion) in the last fiscal from Rs 39,275 crore (Rs 392.75 billion) in the previous year, the outcome Budget of the ministry of commerce said.
The government is considering enacting a law making it mandatory for industries to rehabilitate the displaced people before developing projects under the special economic zones.
Amid reports that a large chunk of agri land has fallen into the hands of land builders and industrialists in Uttarakhand, the state government is contemplating special agriculture zone to protect agriculture. But it was not immediately known whether SAZ would form a part of the new agriculture policy, which is being discussed by the government.
The West Bengal government may consider asking companies to directly purchase land for all industrial projects, including the Salim group's proposed SEZ.
The Export Promotion Council for EOUs and SEZs has raised the issue with the Finance Ministry and is expecting a favourable response in the Budget. At present, units in the DTAs have to pay two per cent CST on goods bought from the special economic zones.
Amid controversy over the setting up of China-style special economic zones, India on Thursday said the government recognised SEZs as 'an useful tool' in furthering industrialisation but will implement the concept in its 'own way'.
Confederation of Indian Industry has sought higher banking exposure norms for lending to steel projects and infrastructure status to the steel industry, besides tax sops on par with special economic zones to boost the sector.
The United Progressive Alliance government has made it clear to states that it will not permit them any relaxation in labour laws in special economic zones, petrochemical hubs and industrial parks such as easing norms for hiring and firing and employment of women and restricting union activity, among others. Over the last two weeks, at least three state governments have seen their proposals for relaxing labour laws in duty-free areas being rejected by the Centre.
"Out of three SEZs only one has done some work. We will give back all the developers only the money which they had invested in buying the land as we are taking the land back from them," State Chief Minister Digamber Kamat said.
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.
The government on Thursday announced substantial benefits to farmers, including a continuous source of income, for their land taken for industrial projects while making it easy for corporate India to acquire land with state help.The National Policy on Rehabilitation and Resettlement, 2007, which was cleared at a meeting of the Union Cabinet chaired by Prime Minister Manmohan Singh, provides for land-for-land compensation, besides preference to affected families for jobs.
TRIL is planning to raise a Rs 4,770 crore international infrastructure fund by the end of the year to invest in infrastructure projects like building special economic zones, roads, ports and other core sector projects in the next three years. Tata Realty has already raised a Rs 3,500 crore offshore fund for investing in its real estate projects, 20 per cent of which is deployed. The other 80 per cent will be used in the next three years.
"We do not have tanks there, but we have people there going to farmers' houses and beating them up and threatening to kill them."
Unaffected by controversies, global financial market heavyweight Soros group, has approached the Indian government, expressing interest to invest in special economic zones in India.
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.
While leading SEZs like Mahindra World, Nokia, Apache, Hyderabad Gems and Jewellery became operational in 2008-09, exports from these zones fell short of target of Rs 1,20,000 crore (Rs 1,200 billion) in the last fiscal, according to the Export Promotion Council for EOUs and SEZs.
The domestic IT major Tata Consultancy Services said that its major expansion would henceforth take place within the notified Special Economic Zones in the country. TCS is setting up its largest global operating unit to accommodate 20,000 professionals in Rajiv Gandhi Infotech Park at Hinjewadi, Pune, a notified SEZ. Maharashtra Chief Minister Vilasrao Deshmukh on Wednesday laid the foundation-stone for the facility, which will become operational by December 2009.
"If the tax holiday is withdrawn, STPIs will lose the level-playing field vis-a-vis special economic zones. We have recommended that the government either withdraw the tax holiday to SEZs or continue the incentive to IT companies," an official with knowledge of the deliberations told Business Standard. STPIs enjoy direct tax exemption under sections 10A and 10B of the Income-Tax Act, 1961. The benefits are scheduled to expire on March 31, 2009.
Questions over proposed changes in land use are piling up, even as the commerce ministry and Maharashtra government are rushing to give in-principle approvals and conditional no-objection certificates to special economic zone developers.
Tata group Chairman Ratan Tata has written a letter to Chief Minister Y S Rajasekhara Reddy indicating that Tata Advance Systems was keen to invest in the hub in the proposed Special Economic Zone in Adibhatla village, on the outskirts of the state capital.
The industry alleges the government has been apathetic, despite their pleas for quick action. However, H2 may be different as The US-China trade war had opened a window for Indian exporters to ship more to America.
Even as Anil Ambani's proposal for a special economic zone in Noida was turned down by the Uttar Pradesh government on Saturday, Mukesh Ambani's Mumbai SEZ (formerly called the Maha Mumbai SEZ) has also run into problems.
Mumbai-based pharma major Lupin will invest over Rs 200 crore (Rs 2 billion) this year to create additional manufacturing capacities.
The alternative location is to be selected by the state government, which has appointed Mott McDonald, an engineering and development consultancy, to identify a new location.
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