Are SEZ curbs thwarted?
Does the notification on PCPIRs issued on April 4 by the ministry of
chemicals and fertilisers contradict the new stipulation in the SEZ
policy that state governments will not be allowed to acquire land on
behalf of the private developers? It would seem so, going by two
paragraphs in the notification.
It says: "State government would identify a suitable site, prepare the
proposal and seek approval... It will notify the PCPIR area under the
relevant act and acquire/assist on acquiring the land necessary for the
setting up of the infrastructure, processing and non-processing area.
The acquisition of land, if any, must be in accordance with law and must
provide rehabilitation as per laid down norms.
As far as possible, acquisition of agriculture land may be avoided." It
further says: "The required land within PCPIR will be made available to
the developer by state government through PCPIR management board by way
of a concession."
SEZs can be subsets in PCPIRs, envisaged to come up in 250 sq km, with
minimum 40% (100 sq km) processing area. As per the notification, PCPIR
could include "one or more SEZs, industrial parks, free trade and
warehousing zones, export-oriented units, etc. The benefits normally
ascribed to such titles will be available to those in PCPIRs also.
Otherwise PCPIR units don't qualify for any tax break other than Section
80 (1) (A) tax holiday for infrastructure.
Thanks to the decision of eGOM, virtually the developer—whether it is
the state or a private entity—will have to acquire the land on its own
to set up an SEZ. The state cannot use its legal authority to acquire
land for public purposes, if the same is transferred to the private
developer. Housing an SEZ in a PCPIR seems to allow the SEZ developer to
circumvent the policy restriction, unless the SEZ Act states that it
overrides the PCPIR notification.
The Centre will ensure external infrastructure linkages to PCPIR,
including rail, road (NH), ports, airports and telecom, in a timebound
manner. To the extent possible, the infrastructure will be created
through the PPP mode. Budgetary outlays and viability gap funding route
would be used for building the infrastructure.
States will accord the regions high quality power and water. It reckoned
that since these projects are to be backed by infrastructure funding of
$3 billion per region by the Centre, it will be superfluous giving them
tax sops. Sources said that the Cabinet had decided that the number of
PCPIRs could initially be capped at 5. Many state governments have
expressed willingness to set up PCPIRs. These include Gujarat (Dahej),
West Bengal, Andhra Pradesh (Vizag) and Karnataka (Mangalore). Tamil
Nadu, Maharashtra and Haryana may follow suit