Wednesday, February 14, 2007

PMO game for Japan-funded SEZs on Delhi-Mumbai route



NEW DELHI: Even as the government has imposed a freeze on approval of
new special economic zones (SEZ), the Prime Minister’s Office (PMO) is
open to the idea of setting up multi-product SEZs along the proposed
Delhi-Mumbai industrial corridor to be funded by Japan.

In a recent meeting on the India-Japan special economic partnership
initiatives, it was decided that new SEZs would be considered after the
concept paper on the industrial corridor is finalised in the next couple
of months.

In the meeting chaired by principal secretary to the PM, it was decided
that the department of industrial policy and promotion (DIPP) would
inform the Japanese side about the nature of the industrial corridor as
envisaged by India and also discuss the nature of assistance.

Speaking to ET, official sources said that since the Indian government
has promised Japan that there would be SEZs on both sides of the
industrial corridor, it needed to be honoured. “Singapore has already
complained that India is not living up to the promises made while
attracting investments in SEZs from the country. Japan too might make
similar noises if the current impasse on the SEZ policy is not sorted
out soon,” an official said.

Japan and India had signed a memorandum of understanding on cooperation
for the industrial corridor project in December. The 1,160-km corridor
to be developed along the Delhi-Mumbai multi-modal freight route is
expected to bring together clusters of high-quality infrastructure
including power facilities, SEZs, ports and rail connectivity to ports.

Since DIPP has plans to prepare a project report and present it to the
Japanese side in two-three months, the government needs to have a clear
policy on SEZs before that. On January 22, the empowered group of
ministers (eGoM) on SEZs had put on hold fresh approvals and
notifications of SEZs till it decided on the future course of the policy.

The eGoM is exploring the possibility of imposing ceilings and caps on
SEZs and making other regulatory changes in the SEZ policy following
protests from Left and other parties on misuse of the policy. Since the
eGoM has not disclosed plans for its next meeting, more than 300
developers, both domestic and foreign, whose proposals are pending with
the government have their fingers crossed.


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