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Think tank to take stock of SEZs

To take stock of the performance of special economic zones (SEZ), the commerce ministry has asked Delhi-based think tank Icrier to find out the difference between the number of approved and operational SEZs.

To take stock of the performance of special economic zones (SEZ), the commerce ministry has asked Delhi-based think tank Icrier to find out the difference between the number of approved and operational SEZs. The commerce and finance ministries have been at loggerheads on the success of SEZs in terms of investment, employment generation and exports.

?The finance ministry suspects the SEZs’ performance and has been withdrawing the benefits given to them. Besides, the MAT was also imposed on these zones due to which denotifications have been rising. Hence, there is a wide difference between the SEZs approved and operational and the Icrier survey will look at that,? said PC Nambiar, chairman, Export Promotion Council for EoUs and SEZs (EPCES).

The think tank will submit its report on the notified, approved and operational SEZs, besides operators and developers in six months. The SEZ sector achieved 35% export growth in December 2012 and the contribution of SEZs to national exports is 28%. A large of the export growth is attributable to Reliance’s Jamnagar refinery exports.

The zones have faced rough weather since the government imposed a Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) in the 2011-12 Budget, the former on the units and both taxes on SEZ developers. Of the 588 SEZs formally approved, 385 have been notified but only 161 are operational.

In fact, the commerce ministry has been reviewing the SEZ policy as the growth in exports from SEZs sharply declined from over 121 % in 2009-10, 43.11 % in 2010-11 to only 15.39 % in 2011-12. Moreover, there has been a significant increase in the last two financial years of the number of applications for de-notification of approved SEZs.

Thirty-seven of the total 46 denotifications of SEZs having been approved in 2010-11 and 2011-12. This is in addition to the number of withdrawal applications for formal and in-principle approvals granted to SEZ projects.

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First published on: 25-06-2013 at 01:00 IST
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