NEW DELHI: Beset by falling exports, the government is revisiting its policy on special economic zones in the hope of rekindling interest among investors. With industry and state governments citing problems with land acquisition, the commerce department is considering relaxing the minimum area requirement for more sectors in the final amendments in the SEZ rules.
These changes are being looked at even as the government is yet to put into effect the announcement made by commerce and industry minister Anand Sharma three months ago.
The department has identified agro-processing SEZs as the main thrust area and plans to cut minimum land requirement from 100 hectares to 10 hectares for agro-processing SEZs.
"We are looking at some changes following demands from industry and also state governments," an official told ET. "States have demanded relaxation as they do not have enough land."
Among the changes being mulled is halving of the area requirement for setting up of multi-services SEZs to 50 hectares from 100 hectares. Multi-services SEZs would be considered on a par with single-product SEZs.
As per the new changes, SEZ developers will also be able to add another sector on additional contiguous 50 hectares on multi-product SEZs.
To give a fillip to exports, the government in April had halved the minimum area requirement for single-product SEZs to 50 hectares and that for multi-product SEZs to 500 hectares. While the minimum land requirement norm for IT SEZs was scrapped, it was left unchanged for multi-services SEZs. These changes, however, are yet to be implemented.
According to sources, Sharma has put these proposals on the fast track and asked ministry officials to ensure that the new norms are put in place before the end of the month. The law ministry, however, is yet to vet the proposed notification. If accepted, these changes will supplement the policy alterations made by the government three months ago.
Falling exports has put pressure on the current account deficit, which widened to an all time high of 4.8% of GDP in 2012-13. Continued contraction in exports in the current financial year has set alarm bells ringing among policymakers who are now casting about for ways to boost exports.
India's exports declined 1.41% to $72.4 billion in the first quarter of 2013-14.
SEZs, which witnessed 31% growth in exports despite an overall contraction of 1.86% in the country's outbound trade, are seen as the new saviour.
Source:-economictimes.indiatimes.com
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