The government today approved the proposals of three new Special Economic Zones (SEZs), including that of Videocon Industries, even a the doubts over continuation of tax sops continue to bog the sector which has been on the decline since end of due to global slowdown since the last one year.
The Board of Approval (BoA) under the Ministry of Commerce (MoC) has given approval to only three fresh SEZ proposals, one of Videocon, the other to being the project by Coastal Ferrotech Limited to set up SEZ in Haldia East Mednipur and Infoparks Kerala to set up a SEZ in the Ernakulam district.
Videocon Industries will be setting up SEZ for electronics hardware and software in Navi Mumbai over 100 hectare. Besides approving the SEZs, the BoA also approved the Essar SEZ Hazira‘s request for de-notification of its sector specific zone in Gujarat.
The BOA also gave extensions to 24 developers including majors like GMR Hyderabad International Airport Ltd, Unitech Kochi SEZ Ltd and K Raheja Corp. The BoA, however, deferred two key decisions, one on the guidelines for giving a waiver on a clause in the Rules which require that SEZ should be built on a single piece of land and the second one on a proposal to tighten environment norms for plastic units in SEZs was also deferred.
Apart from the global slowdown the industry has also been dampened by the draft Direct Tax Code (DTC) of the Finance Ministry which proposed elimination of the income tax exemptions on export incomes on new SEZs and units there in. This proposal has also been a cause of worry for those who have already obtained approvals but have not started their projects.
Of the 580 approved SEZs, about 111 are functional which have contributed to about 25 per cent of the country‘s exports in 2009-10 and attracted investments worth Rs 1.5 lakh crore.