Special Erroneous Zones

New law to rehabilitate SEZ

2007-07-10T12:56:00.003-07:00

New law to rehabilitate SEZ

PTI[ SUNDAY, JULY 08, 2007 02:25:48 PM]

NEW DELHI: The new rehabilitation law may make it binding on promoters
to develop infrastructure such as roads in the 20-kilometre periphery of
a special economic zone, besides providing facilities like health,
education and housing to the people displaced by the project.
"The responsibility of the people acquiring land will not be limited
within the SEZ in which they operate. They will be responsible to share
the development responsibility along with the state government within a
periphery of 20 km of an SEZ," a high-level government official said.
The National Rehabilitation Policy, which will be converted into a law,
could also require SEZ developers to share a larger responsibility along
with the state government.
The draft of the Rehabilitation Bill, being prepared by the Rural
Development Ministry, provides for strong punitive action against those
failing to fulfil the responsibility towards those displaced and the
inhabitants in nearby areas.
As per the proposed law, state governments would be asked to set up an
oversight mechanism to ensure that SEZ developers meet their obligations.
Further, unlike the present arrangement, "quite a large part of the
compensation will have to be paid well before the displacement itself",
the official said.
The Rural Development Ministry is also proposing 'Land for Land Policy'
where alternate land should be provided. In case of larger displacement,
developers would be asked to set up a separate colony for the affected
people with facilities like education, health and housing.
The government has so far approved more than 500 SEZs, including formal
and in-principle, but has been facing stiff opposition on the matter,
particularly after violent protests at Nandigram in West Bengal and
other places.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/New_law_to_rehabilitate_SEZ/articleshow/2186117.cms

SEZ approval validity to be extended on land buy delays

2007-07-10T12:56:00.001-07:00

AMITI SEN & G GANAPATHY SUBRAMANIAM

TNN[ MONDAY, JULY 09, 2007 04:35:39 AM]

NEW DELHI: With land becoming a scarce resource after the politial furore over land acquisition by states, the central government has decided to extend the validity of approvals provided to special economic zones (SEZ). This follows complaints from SEZ developers that projects are being delayed due to problems related to purchase of land.

According to to government sources, developers with in-principal approval but are not in possession of land can get the validity of their approvals extended by two years. This means that approvals for projects such as Reliance’s multi-product SEZ in Gurgaon and Posco’s steel SEZ in Orissa, which were given in-principle approval last year, will not lapse this year.

Extension of approval, however, will not be automatic. The commerce department plans to increase the validity of approvals initially by a year and follow it up another next year if it is necessary to do so. Also, validity of extension would be extended only in the case of developers who formally apply to the commerce department for this facility.

Developers have to apply for an extension before the lapse of the initial one-year validity period, the soruces said. Requests from developers who have not made any attempts to acquire land in the one-year period will not be considered for validity extension.

Speaking to ET, commerce department officials said that the board of approval (BoA) for SEZs decided on extending the validity period for proposals as the land acquisition process had slowed down considerably in the last few months.

“Following Ms Sonia Gandhi’s warning to Congress-ruled states last October in Nainital against acquiring farmland for industrial purposes and the protests against acquisition in Nandigram and Maha-Mumbai, there is a general slow-down in the process,” an official said. State governments have now become more cautious in handing land to SEZ developers and there have been very few transactions since October last year, the official added.

The BoA gives in-principal approval to developers who have their project plans in place but have not yet acquired land. Once the developer acquires land, the proposal is placed before the BoA for formal approval following which the developers goes through the formality of getting the SEZ notified.

Once the validity period of an in-principal proposal lapses and the developer is not able to acquire land during the period, the the developer has to start from scratch for getting the proposal approved. There are a total of 162 proposals which have been in-principally approved by the government.

The commerce department is also planning to amend SEZ Rule 18 4 (g) which states that use of previously-used machinery will not be allowed in the SEZs to bring it in line with the budgetary announcement allowing SEZ units to import second-hand capital goods to the extent of 20% of its total requirement. “The provision to allow used capital goods to the extent of 20% was already made in the income tax Act as part of Budget 2007. The commerce department is making changes in SEZ rules to bring it in line with the changes made by the finance ministry,” said L B Singhal from the export promotion council for EoUs and SEZs.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/SEZ_approval_validity_to_be_extended_on_land_buy_delays/articleshow/2187398.cms

--
Sudarshan Rodriguez

Sudarshan Rodriguez,

Senior Research Associate,

Ashoka Trust for Research in Ecology

and the Environment (ATREE)

CHENNAI

Flat 2B, Aditya Apartments,

38 Balakrishna Road,

Valmiki Nagar, Thiruvanmiyur,

Chennai-600 041

Tamil Nadu, India.

Phone:+91 44 420 19470

Fax: +91 44 420 19468

BANGALORE

Ashoka Trust for Research in Ecology and the Environment

No 659, 5th ‘A” Main, Hebbal,

Bangalore 560024

Direct line: 080 - 65356130

Tel: +91 80 23533942, 23530069, 23638771

Fax: +91 80 23530070

Mobile: +91 9840680127

Email: sudarshanr@yahoo.com

Post- Tsunami Environment Initiative

(www.ptei-india.org)

You are not what you do , you do what you are

One's profession and career should be their hobby, passion and cause

Centre urged to ease IT SEZ norms

2007-07-10T11:19:00.001-07:00

ARUN S
Posted online: Tuesday, July 10, 2007 at 0000 hours IST

NEW DELHI, JUL 9 : Karnataka and Maharashtra have asked the Centre to
relax rules regarding clearance of IT/ITeS special economic zones (SEZs).
The two states house many big IT firms but have a ban on purchase of
agricultural land by non-agriculturists,

Several developers in these two states want the Centre to allow them to
go for in-principle approval initially, so that they can try to get
landuse changed from agricultural to industrial and then purchase them
for SEZ projects.

Non-agriculturists are allowed to purchase industrial land in these
states for purposes like SEZ development.

The Centre had notified in August last year that since the minimum
required area for an IT/ITeS SEZ was only a small land parcel of 10
hectares, developers should apply directly for formal approval after
acquiring the required land and not for in-principal nod without the
land. Currently, the Centre grants in-principal nod to SEZs with a huge
minimum land requirement (sector-specific SEZs with a minimum land
requirement of 100 hectares and multi-product SEZs with a minimum land
requirement of 1,000 hectares).
http://www.financialexpress.com/fe_full_story.php?content_id=169597

Quest plans 300-acre aerospace SEZ in Belgaum

2007-07-07T11:33:00.001-07:00

CHIRANJOY SEN

TNN[ WEDNESDAY, JULY 04, 2007 01:40:53 AM]

BANGALORE: Engineering services major Quest is collaborating with
business partners to establish a 300-acre special economic zone (SEZ) in
Belgaum, Karnataka, to build an ecosystem of aerospace supply chain.

The SEZ-which has been granted in-principle clearance by the Board of
Approvals — will be housing suppliers in a single area and carry out
precision machining. "The SEZ is expected to employ 10,000 people. Talks
are on with a handful of potential domestic companies and MNCs to have
them set up units at the SEZ," says Quest Global CEO Ajit Prabhu.

Quest's present facility in Bangalore, set up in collaboration with
Canadian major Magellan, will also move into the SEZ as a 2,00,000 sq ft
plant. The facility marked Quest's move into manufacturing from being an
end-to-end engineering solutions company.

Quest, which is focused on the aviation sector, felt the "the need for a
dedicated aerospace engineering SEZ, following the huge growth in
engineering services offshoring from India as well as the offset clause
for aircraft firms supplying to Indian carriers, which needs to source a
certain part of their supplies from India," explains Mr Prabhu.

The growth of engineering services outsourcing from India is
well-documented. According to latest industry figures released by
Nasscom, global spending on engineering services was $750 billion in
2004, with aerospace accounting for 8% and could rise to $1.1 trillion
by 2020.

The total offshore engineering spend is expected to grow to $150-225
billion by 2020 and India, with its talent pool and experience in
engineering services, could pick up 25% of that. Prabhu says that he
believes that there is an opportunity of close to $1 billion a year of
exports to be achieved by 2012.

The offset clause for aircraft manufacturers is also expected to give a
big fillip to aerospace-linked manufacturing. India has said it plans to
buy 126 fighter jets, valued at close to $10 billion. On the other hand,
Airbus expects Indian firms to place orders for 1,100 passenger and
freighter aircraft valued at about $105 billion over the next 20 years.
"With the current offset clause pegged at 30% of the purchase value and
looking at the buying estimates, at least $3 billion worth of business
is expected in the next 10 years," says Mr Prabhu.

Quest, which has been growing at 40% year-on-year, is the only
engineering services company that works with the top three global
aero-engine makers – GE, Rolls Royce and Pratt & Whitney. Very recently,
the company had announced that it has received Airbus design approval
and AS9100 certification. This will enable QuEST to work on upcoming
Airbus programs like the A350 in the areas of engineering design,
documentation and manufacturing engineering.

"A significant amount of defence offset business and some of the
commercial offset is expected to be routed through HAL, which in turn
could sub-contract it to Indian private players," Mr Prabhu says.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Quest_plans_300-acre_aerospace_SEZ_in_Belgaum/articleshow/2173031.cms

SIR SEZ new success shortcut for small IT cos

2007-07-07T11:32:00.003-07:00

PRIYANKA TALWAR & NEHA KOHLI

TNN[ WEDNESDAY, JULY 04, 2007 02:14:25 AM]

NEW DELHI: IT special economic zones (SEZ) may find a new anchor. The
government is considering setting up special investment regions (SIR)
where the IT SEZs could be housed to enable small and medium IT
companies avail benefits from both the schemes. Under the SIR scheme,
the government would provide basic infrastructure such as roads and
power while the SEZ scheme would provide for tax benefits.

While large companies such as Wipro, HCL and Satyam have proposed to set
up SEZ projects, the government's focus is now on the small and medium
sectors. As an incentive to the sector, infrastructure facilities would
be provided by the Centre and the concerned states. The companies would
also be eligible under section 80 1(A) for tax holiday for
infrastructure projects.

"Given that most of the production of the IT companies would be
exported, the SEZ advantage to the companies would be huge," a source
close to the development said. The SIRs would also encourage private
investment in urban infrastructure by way of assured market and
complement the concessions such as viability gap funding offered under
the public-private partnership (PPP) policy.

The reason why the government is keen to make the SEZ scheme co-terminus
with the SIR scheme is to prevent a trade-off between the advantages
from both and to ensure the success of the SIR scheme. Already,
2,586-hectare area has been notified for IT SEZs.
"In the absence of an integrated scheme, the companies will have to
choose between quality infrastructure and tax benefits. Although the
latter may be more lucrative from the export angle, smaller companies
may lose out on infrastructure advantages," the source said.

As far as the integration with the software technology parks is
concerned, the source confirmed that if the software technology parks of
India (STPI) scheme is extended beyond 2009, then an STP in an SIR can
avail benefits under both STPI and SIR schemes.

According to the proposed SIR policy, the Centre would provide external
physical infrastructure linkages such as national highways, railways
including mass rapid transport systems, airports and state-of-the art
telecom network.

The states would identify the site and make available local
infrastructure such as good quality power, bulk water supply, smaller
roads, sewage, effluent treatment plants etc, as well as facilities for
health and education and other social infrastructure.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/SIR_SEZ_new_success_shortcut_for_small_IT_cos/articleshow/2173081.cms

Essar Hazira SEZ case before Law Ministry

2007-07-07T11:32:00.001-07:00

PTI[ FRIDAY, JULY 06, 2007 02:25:45 PM]

NEW DELHI: The Law Ministry, examining the report of the Development
Commissioner, will decide the fate of Essar's SEZ in Hazira where
alleged flouting of rules was detected.

"The report of Development Commissioner was sent to the Revenue
Department, which referred it to the Law Ministry to decide whether the
Essar already had a unit there which was converted in to an SEZ against
the rules," an official said.

Under rules, a developer has to file an affidavit stating that the land
is vacant and no industrial activity exists at the time of application
for an SEZ.

Essar, however, has so far maintained that it had invested only Rs 60
crore for the development of the site before making an application for
Rs 1000 crore steel SEZ. This money was spent on site development and no
industrial activity had started.

Officials said since it was difficult to clearly establish whether the
activity, which Essar said was related only to the development of the
area, could be categorised as an industrial exercise. "It is not a cut
and dry case and requires interpretation of the Act... that is what we
need Law Ministry opinion for," they said.

It was alleged that Essar had converted its existing facility into an
SEZ, which is not allowed under the Act.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Essar_Hazira_SEZ_case_before_Law_Ministry/articleshow/2181942.cms

Rehab policy, fertile land security may hold up SEZ notifications

2007-07-07T11:31:00.003-07:00

TNN[ SATURDAY, JULY 07, 2007 04:17:27 AM]

NEW DELHI: The policy on special economic zones (SEZ) may have to face
another test. The parliamentary standing committee on commerce has
recommended a freeze on all new notifications and clearances till SEZ
rules and Act are amended to protect fertile agricultural land and
safeguard the interest of farmers and other stake holders.

The committee has suggested a ceiling of 2,000 hectares for
multi-product SEZs built on land that includes cultivable paths. The
present ceiling of 5,000 hectares has been recommended only for
multi-product SEZs built on wasteland.

Proposing a ban on use of irrigated double-crop or multi-crop land for
setting up SEZs, the panel said normally only waste and barren lands
should be used. If unavoidable, the committee said that only
single-crop, rain-fed land should be used up to an extent of 20% of
total area for multi-product SEZs and 40% of total area for others.

While the recommendations of the committee are not binding on the
government, the commerce ministry has to give a point-by-point reply to
all questions raised in the report within three months. The report,
which will be submitted in Parliament, may also be debated there and
this may mount pressure on the government for further tightening of SEZ
rules.

Replying to a question on whether the recommended freeze on new SEZs
should be in place for the entire period of time the amendments are
debated by the government, committee chairman Murli Manohar Joshi said:
"Heavens will not fall if there is a delay of few months."

It may be recalled that a 10-week freeze was imposed on notifications
and clearances of new SEZs on January 22 following widespread resistance
to forcible land acquisition by the government. The freeze was lifted on
April 6 when the government decided to impose a 5,000 hectares ceiling
on multi-product SEZs and increase processing area for all SEZs to 50%
of total area.

The standing committee has also recommended ceilings for smaller SEZs.
For multi-services and sector-specific SEZs, the ceiling recommended is
200 hectares for land including cultivable portions and 500 hectares for
wasteland. For IT, gems & jewellery and biotech SEZs, the limit is 20
hectares for cultivable land and 50 hectares for wasteland.

The land acquisition Act, 1894, should be replaced by a modern
legislation which is relevant to the needs of the time, the committee
said. Unless the public purpose for which the land is being acquired
involves an over-riding national interest like defence or national
security, the acquisition should take place with the consent of the
affected parties, it said.

On a suitable compensation package for farmers and other oustees, the
committee said that monetary compensation should be only a part of the
package and should be calculated on the basis of prevailing market rates.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Rehab_policy_fertile_land_security_may_hold_up_SEZ_notifications/articleshow/2183669.cms

GVK wins bid to develop multi-product SEZ in Tamil Nadu; SPV being readied

2007-07-07T11:31:00.001-07:00

INFRASTRUCTURE BUREAU
Posted online: Saturday, July 07, 2007 at 0005 hours IST

CHENNAI, JUL 6: Hyderabad-based GVK group, engaged in infrastructure
development, power generation, toll roads, airports, has won the
international competitive bidding process floated by the Tamilnadu
Industrial Development Corporation (TIDCO) to develop a multi-product
special economic zone (SEZ) at Perambalur in Tamil Nadu.
GVK will be floating a special purpose vehicle—GVK Infratech Pvt Ltd—in
association with TIDCO—to attract huge investments from domestic as well
as global investors.

A memorandum of understanding between TIDCO and GVK group was signed in
the presence of the chief minister M Karunanidhi on Friday.

GVK Infratech will create common infrastructure such as internal roads,
water supply, captive power plant, CETP, testing, warehousing facilities
among others at an estimated investment of Rs 1,500 crore and these
investments will be made over a period of five years, said a TIDCO
statement issued here.

The state government has already issued administrative sanction for
acquiring 3,156 acres of land of dry and barren land for this project.
The Union government has given an in-principle approval for this
multi-product SEZ.

The state government hopes that the proposed SEZ will generate
investments to the tune of Rs 5,000 crore with an employment opportunity
for more than 50,000 people. The project, expected to be completed
before 2009, would bring in an export revenue of Rs 6,000 crore.

The SEZ will cater to industries such as textiles, garments, leather,
engineering goods, pharmaceuticals, power, IT and ITeS, iron & steel,
fertilisers, chemicals, petrochemicals, floriculture, horticulture,
electronic & communication, said GV Krishna Reddy, chairman, GVK group.

Speaking on the occasion S Ramasundaram, CMD, TIDCO said, "I am very
happy that GVKPIL and the Tamil Nadu government have tied up to jointly
develop a special economic zone in Perambalur district. I am confident
that TIDCO's long experience in setting up industrial parks coupled with
GVK's established track-record as an integrated infrastructure developer
will result in a world-class project that would attract large
investments in the state, create huge employment opportunities for our
people and bring immense prosperity in the region. This would go a long
way in consolidating Tamil Nadu's position as the leading industrial
state in the country."

http://www.financialexpress.com/fe_full_story.php?content_id=169337

House panel seeks freeze on new SEZs, wants change in the law

2007-07-07T11:30:00.003-07:00

POLITICAL BUREAU
Posted online: Saturday, July 07, 2007 at 0000 hours IST

NEW DELHI, JUL 6: A parliamentary committee on SEZs, headed by senior
BJP leader Murli Manohar Joshi, has demanded an "immediate freeze" on
the approval of new SEZs, until the law regarding this is amended to
"protect farmers and other stakeholders". The committee, in its report,
has also hit out at the UPA government for its "undue haste" in clearing
"hundreds" of SEZs.
"No further SEZs should be notified till the SEZ Act and Rules have been
amended to meet public concerns," the report, submitted to Rajya Sabha
chairman Bhairon Singh Shekhawat recently, said. "There is an imperative
need to understand the cause of farmers' agitation and grievance," the
report added.

"There should preferably be a ban on the use of irrigated double crop
land for setting up SEZs and normally waste and barren land should be
used," Joshi told reporters, while briefing on the contents of the
report. "Heavens will not fall if there is a delay," he retorted when
asked what if amending the Act takes much time. "Undue haste in
approving SEZs and their proliferation has contributed to the resistance
against the policy," he observed.

"We demand a ceiling of 2,000 hectares on multi-product SEZs coming up
on cultivable land. If cultivable land is indiscriminately given to
SEZs, the country would plunge into a famine-like situation," the former
Union minister said. "The directions should be incorporated in the Act,"
Joshi added.

The committee, in its report, has also said that the members were not
allowed to meet affected farmers when visited Jhajjar in Haryana,
Hyderabad, Bangalore, Jamnagar and Mumbai. "The committee members are
pained to note that at some places, the farmers were not allowed to meet
MPs," Joshi said. "The government is bound to respond in the form of
Action Taken Report in three months. We will not let the issue rest
unless the government satisfies us," he added. He also said there should
not be any in-principle clearances.

http://www.financialexpress.com/fe_full_story.php?content_id=169329

SEZ old machinery rules set to ease ,

2007-07-07T11:30:00.001-07:00

SEZ old machinery rules set to ease

ARUN S
Posted online: Saturday, July 07, 2007 at 0138 hours IST

NEW DELHI, JUL 6: Units in Special Economic Zones (SEZs) will soon be
permitted to shift in second-hand equipment worth up to 20% of their
total investment. This is a departure from existing provisions in the
SEZ Rules which specify that the entire investment in SEZs should be
'fresh', thereby disallowing the relocation of second-hand equipment
from the domestic tariff area (DTA) to SEZs.
To prevent migration from the DTA to such tax-free enclaves, the SEZ
policy had earlier specified that no unit that shifted old machinery
would be given approval.

A proposal to ease the old rules has been forwarded by the commerce &
industry ministry to the law ministry. Government officials said this is
to address difficulties faced by certain sectors in obtaining
much-needed second-hand capital goods. "There are some capital goods
like testing equipment, routers and network equipment which are
considered specialised and very difficult to purchase quickly when a
unit sets up shop in an SEZ. Such equipment may be allowed to shift from
the DTA to an SEZ," an official said.

However, such shifting of old equipment will be considered on a
case-to-case basis and "only where we are completely convinced about the
necessity", the official said, pointing out that even in such cases, the
government would ensure that 80% of the investment is fresh. The amended
rules would also clarify that there was no restriction on second-hand
vehicles from carrying goods in and out of SEZs.

One of the objectives of the SEZ policy is to attract fresh investment
in terms of money and machinery.

SHIFTING GEAR
• SEZ policy had disallowed shifting of old machinery to prevent migration
• However, some sectors faced difficulties in obtaining critical
equipment when setting up shop in SEZs
• Cases would still be considered on a case-to-case basis, within the
overall 20% cap on old machinery

Experts see the government's new proposal as providing a breather to
units making huge investments. "This would be a welcome change as it
would provide operational flexibility for SEZ units. Earlier, there were
some genuine cases where the restrictions caused a lot of bottlenecks.
Besides, there was no clarity regarding the provision regarding this
rule on second-hand equipment," said Abhishek Goenka, partner &
executive director, BMR & Associates.

"This 20% value is minimal, as 80% coming in is fresh investment. It is
better to use such critical equipment than throw it away as scrap. Even
in the Budget, the finance ministry had amended the Income-Tax Act to
this effect. Now, the SEZ Rules will be aligned to that," said LB
Singhal, director general, Export Promotion Council for EOUs & SEZs.

http://www.financialexpress.com/fe_full_story.php?content_id=169357

Says such schemes generate very little new investment

2007-07-04T10:22:00.000-07:00

OECD seeks review of sops to SEZs

ECONOMY BUREAU
Posted online: Wednesday, July 04, 2007 at 0005 hours IST

NEW DELHI, JUL 3 : The government should review the tax concessions
given to special economic zones, export processing areas and software
technology parks, the Organisation of Economic Cooperation and
Development (OECD) has suggested at the two-day International Tax
Conference on Tuesday.
Pier Carlo Padoan, deputy secretary general OECD, said at the
conference, "The work undertaken by OECD suggests that such schemes
generate very little new investment and that there are considerable
advantages in ending such incentives." The conference was jointly
organised by the ministry of finance, Asian Development Bank (ADB) and OECD

Such schemes also have a tendency to distort the economy and do not
result in sustainable tax revenues, he added. The recommendation comes
at a time when the finance ministry has already made public its
reservations about such schemes.Simultaneously, it is also looking at
cutting down on various exemptions it has given out. The government is
also set to embrace international experiences in its efforts to
modernise and simplify the country's tax procedures and administration.

Issues relating to transfer pricing, international taxation,
strengthening the audit capacity, business process re-engineering and
improving taxpayer services will be some of the key areas where the
finance ministry may embrace international practices.

International models will also influence the movement towards
introduction of the goods and service tax regime. These decisions were
taken based on the recommendations of the conference.

Speaking at the conference on Tuesday minister of state for finance SS
Palanimanickam said, "The conference has provided an opportunity to the
revenue department officials to interact and brainstorm with their
counterparts from other administrations as well as experts and to learn
first-hand from their experiences."

So far, the country's tax reforms have been evenly poised in addressing
tax policy and administration issues, the minister noted. The broad
thrust of policy changes has been to simplify and moderate the rate
structure; rationalise exemptions and remove anomalies as well as to
expand the tax base, he said.

On the administration side, the cornerstone has been procedural
simplification to make it easier for the taxpayer to quantify and
discharge his tax liability, he added.

http://www.financialexpress.com/fe_full_story.php?content_id=169034

GMR Infra setting up 2 SEZs in Hyderabad

2007-07-03T11:09:00.001-07:00

Our Bureau

Mumbai, July 1 GMR Infrastructure Ltd is setting up an exclusive Special
Economic Zone (SEZ) for manufacturing aviation speciality products in
Hyderabad.

This is one of the two SEZs being set up by the group in the 50-acre land.

The other would be a multi-product SEZ housing IT-ITES, bio-technology,
garments and apparels and electronics industries, said Mr Madhu Terdal,
Chief Financial Officer.

The company will also have two Maintenance, Repair and Overhaul (MRO)
units at the upcoming Hyderabad International Airport in Shamshabad
area. While one will be operated by GMR in association with Lufthansa
Technik, the current MRO run by Indian Airlines will be shifted to the
new airport.

A hospitality district similar to the one in Delhi is being planned in
the new airport in Hyderabad too.

Speaking about plans for developing more airports, Mr Terdal said the
company would look at bidding for Chennai Greenfield airport and Navi
Mumbai too.

http://www.thehindubusinessline.com/2007/07/03/stories/2007070351660300.htm

Janata Dal (S) flays Congress on SEZ

2007-07-03T11:04:00.001-07:00

Staff Correspondent

Mangalore: Janata Dal (Secular) is ready to take on the Congress on a
move by the State Government to allot land for setting up special
economic zones (SEZ) or townships, party spokesperson and Member of
Legislative Council (MLC) Y.S.V. Datta has said.

It is ironical that the Karnataka Pradesh Congress Committee was setting
up a parallel fact-finding committee on land grabbing when a house
committee headed by A.T. Ramaswamy was doing the job, he said here on
Monday.

Mr. Datta told presspersons that the KPCC fact- finding attempt was a
move to divert the attention of people from the probe by Mr. Ramaswamy
because they were afraid that their misdeeds would be exposed, he said.

Congress government under S.M. Krishna had acquired vast tracts of land
in and around Bangalore ostensibly to create information technology and
bio-technology related infrastructure. Congress leaders should come out
with details on extent of land acquired, compensation paid to farmers,
employment opportunities created for them and, more importantly, if the
land was used for the right purpose, Mr. Datta said.

Mr. Krishna's government enabled realtors to grab lands of poor farmers
by initially getting them notified. When the farmers sold their lands
out of fear that they might not get suitable compensation, the
Government subsequently de-notified the lands, allowing realtors to
acquire the land, he charged.
http://www.hindu.com/2007/07/03/stories/2007070360570300.htm

States get 60-day deadline to clear SEZ proposals

2007-07-03T11:01:00.001-07:00

States get 60-day deadline to clear SEZ proposals
AMITI SEN

TIMES NEWS NETWORK[ WEDNESDAY, JUNE 27, 2007 03:19:08 AM]

NEW DELHI: The Centre has warned state governments that if pending state
approvals for proposed SEZ projects are not granted within 60 days, the
proposals would be taken off the list of cases to be considered by the
board of approvals (BoA) for SEZs. As many as 170 SEZ proposals lying
with the commerce department are still to receive the go-ahead from the
respective state governments, where they are to be set up. Reliance
ADAG's proposal for a multi-product SEZ in Noida also figures in the
list as the Mayawati regime has withdrawn the state's approval.

Speaking to ET, commerce ministry officials said at the BoA meeting on
June 22, it was decided that the board would not keep holding on forever
to proposals that had not received state government nod. It was decided
that letters would be sent to states asking them to take a decision on
the pending proposals within 60 days. "Two months is long enough for
states to decide whether they want to back a proposal or not. If they do
not respond by the given time, the proposals may be taken off the list
and developers would have to re-apply," an official said.

Officials said if the states act immediately, a number of pending
proposals can be taken up at the next BoA meeting scheduled for July 12.
"Till date, there are just 19 proposals on the list for the next BoA
meet. As we can take up to 40 proposals in a meeting, if state
governments hurry, a number of pending proposals can be taken up at the
next meeting," the official said.

The recently sworn-in Mayawati government in UP, however, is expected to
take its time to grant approval to projects. The UP government has
revoked its approval for private sector SEZs that were pending with BoA
on grounds that they needed to be scrutinised again.

A total of 339 SEZs have received formal approval so far, of which 126
have been notified. In all, Rs 35,145 crore has been invested in these
zones, which have created 32,578 direct jobs.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/States_get_60-day_deadline_to_clear_SEZ_proposals/articleshow/2152296.cms

Navi Mumbai SEZ to come up before BoA on July 12

2007-07-03T11:00:00.003-07:00

PTI[ SUNDAY, JULY 01, 2007 12:15:46 PM]

NEW DELHI: The much-delayed Navi Mumbai special economic zone promoted
by Reliance Industries chairman Mukesh Ambani will come up for formal
clearance before a central government panel on July 12 after getting a
green signal from the Maharashtra government on the issues raised by
Revenue Department.

Besides, the Board of Approval will be taking up for clearance of a
multi-product SEZ at Chhindwara in Madhya Pradesh, the Lok Sabha
constituency of Commerce and Industry Minister Kamal Nath.

In all, the Board will consider 38 proposals. If approved, this will
take the overall SEZ approvals - formal as well as in-principle - to
over 500 after the new SEZ Act came into force in 2006, government
officials said.

The government has already approved Ambani and Anand Jain-led
consortium's three single-product SEZs in the area where the 1.250
hectare Navi Mumbai multi-product zone is also proposed to be set up.
The Navi Mumbai SEZ was given in-principle approval earlier.

The proposal was earlier referred to the Revenue Department as the
proposed zone was said to be non-contiguous and a highway passes through
it. The report of the department, while giving clean chit on the issue,
also wanted to know what would promoters do to protect the interests of
villagers in the area.

The views of state government were also sought by the Board and its
approval came last week which were circulated among the members of the
BoA for consideration.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Navi_Mumbai_SEZ_to_come_up_before_BoA_on_July_12/articleshow/2164792.cms

Development projects offered salt land sweetener by Nath

2007-07-03T11:00:00.001-07:00

G GANAPATHY SUBRAMANIAM

TIMES NEWS NETWORK[ MONDAY, JULY 02, 2007 03:37:08 AM]

NEW DELHI: At a time when India Inc is scrambling to acquire large
tracts of land for industrial development, especially special economic
zones (SEZ), commerce & industry minister Kamal Nath has offered more
than 5,000-acre salt pan land for development projects. The move is of
significance since there is no problem in using salt pan land for SEZs
unlike multi-crop agricultural land the acquisition of which has been
barred. Moreover, a large chunk salt land is located in Mumbai and
Chennai where land prices are steep.

Among the major projects that could benefit from Mr Kamal Nath's offer
is the Mumbai airport. The Maharashtra government, the Centre and the
GVK-led consortium which manages the airport are in consultation to
rehabilitate slum-dwellers encroaching the airport on salt pan lands.

According to details compiled by the department of industrial policy &
promotion (DIPP), nearly 5,378 acres of salt pan land could be freed for
development purposes. Salt pan lands are available in various other
states like Tamil Nadu too, highly-placed government sources said. The
salt department is part of DIPP and is represented by the salt
commissioner.

Some salt pan land in Tamil Nadu is being allotted to public sector
companies like HPCL. This includes areas identified at Ennore near
Chennai for port expansion and a power project. Tamil Nadu Industrial
Development Corp (Tidco) is also in talks for using salt lands for a
SEZ, the sources said.

Mr Kamal Nath feels use of salt lands for industrial development could
make a significant impact in Mumbai. "Several rounds of negotiations
have already been held with state government authorities," the sources
said. The hurdles that need to be overcome are litigation and
encroachment so that these lands can be put to good use. "In Mumbai,
salt pan lands are spread all over the city and the current value is in
thousands of crores if litigation and encroachment are overcome," they
added.

A key proposal under consideration is to use salt pan lands in Mumbai to
relocate the slums that are encroaching airport land. If the slums are
not relocated, expansion and modernisation of Mumbai airport would be
impossible. The GVK-South African Airports consortium, which manages the
airport, has not been able to get land for expansion since encroaching
slums have not been cleared.

Salt pan lands could also come in handy for facilitating SEZ projects
near Mumbai, the sources said. Once corporates acquire land in areas
like Navi Mumbai, salt pan lands could be used for rehabilitation of
oustees. These lands are fit for residential purposes except in the case
of creek lands which are unsuitable for development, the sources said.

As the government has terminated the lease of several salt works, nearly
1,852 acres of land could be made available for development. However,
some of the sat works have moved court against termination of licences.
In the case of another 1,827 acres of land, officials have cited
ownership disputes involving 21 salt works.

In Kanjur village alone, nearly 350 acres of land is in clear possession
of the salt commissioner. In addition, another 350 acres is now being
used by the Maharashtra government as dumping ground.

In Mumbai, there are more than a dozen plots of 5 acres which are being
offered to the Mumbai Port Trust for relocating encroachers holding up
development of a container terminal. Nearly 98 acres of land has been
handed over to the ministry of urban development for socio-economic
projects while the government has handed over 27 acres to a private
party following a Supreme Court verdict.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Development_projects_offered_salt_land_sweetener_by_Nath/articleshow/2166028.cms

Wait may be over for new SEZ plans

2007-07-03T10:59:00.001-07:00

AMITI SEN

TIMES NEWS NETWORK[ MONDAY, JULY 02, 2007 03:38:35 AM]

NEW DELHI: The wait is over for developers of special economic zones
(SEZ) who submitted their proposals to the government after April 6.
After the temporary freeze on approvals was lifted, April 6 was the
informal cut-off date for taking up pending proposals for consideration.
Since there was a huge backlog of pending projects, the government was
focusing on them rather than taking up new ones.

More than a 100 proposals have been approved after the freeze was lifted
and the board of approvals (BoA) is ready to take up proposals submitted
after the cut-off date.

Speaking to ET, commerce ministry officials said the backlog of pending
proposals that have state government approvals have almost all been
taken care of. Nothing was preventing the government from taking up new
proposals, provided they was accompanied by state government
certification. "There was never a ban on new applications. It was just
felt that the older proposals should be dealt with first," an official
said.

The government had frozen approval and notification of SEZs on January
22 this year following widespread protests all over the country,
especially in Nandigram (West Bengal), over acquisition of land by
states. The freeze was lifted on April 6 by the EGoM which decided to
ban coercive acquisition by states. The BoA meet, held on June 22, ruled
that if even one farmer objected to acquisition of land, the state could
not acquire the land for building SEZs.

The BoA reiterated that double crop land in excess of 10% of the total
area cannot be acquired for building SEZs, and state governments should
not give their consent to such proposals.

Interestingly, there are as many as 170 proposals that are awaiting the
state government's nod. Earlier, such proposals would be taken up by the
BoA subject to the condition that states gave their nod within six
months of the approval.However, two months ago, the BoA decided to take
up proposals for consideration only if they were backed by state approvals.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Wait_may_be_over_for_new_SEZ_plans/articleshow/2166029.cms

Core sector SEZ units could get cheaper funds

2007-07-03T10:57:00.001-07:00

SUNNY VERMA & ARUN S
Posted online: Tuesday, July 03, 2007 at 0000 hours IST

NEW DELHI, JUL 2: Some units based in special economic zones (SEZs) may
be allowed to raise loans at core sector interest rates, almost 2
percentage points cheaper than rates applicable to real estate projects.
Currently, RBI treats SEZ development at par with commercial real estate
activity.
The commerce department, which oversees SEZ policy, has suggested to RBI
that an SEZ be divided into various sub-groups such as infrastructure,
integrated township and land development, among others. Units in the
infrastructure sub-group should be allowed to raise loans at lower
rates, it said.

Officials said RBI was considering this proposal and a final decision
would be taken after further consultations. The Prime Minister, too, had
earlier asked the empowered group of ministers on SEZs to decide if
these projects should be given infrastructure status.

While the central bank sees SEZs as similar to real estate for lending
purposes, the commerce department feels SEZ activities attract huge FDI,
generate additional economic activity, create employment, promote
exports and help develop world-class infrastructure.

The department has now suggested that SEZ development activities that
are purely of infrastructure nature should be given core sector status.
The RBI and the commerce department would soon reach a consensus on the
issue, officials said, adding that the central bank is favourably
considering the suggestion.

Partition Plan
• Commerce dept has mooted a sub-group formula for SEZs
• Infrastructure projects in SEZs may borrow at core sector rates
• The move could reduce borrowing costs of SEZ units by nearly 2%
• RBI now studying suggestions made by commerce department

Apart from enabling SEZ units to raise cheap loans, the move would also
expand their funding options. Bankers said giving infrastructure status
to sub-groups in SEZs would encourage banks to increase funding to these
projects.

"Right now, no bank wants to lend to SEZ units, since they are treated
at par with real estate projects. But a change in status would encourage
banks to increase lending to an SEZ project. Plus the interest rates
will become nearly 2 percentage points cheaper for SEZ activities that
enjoy infrastructure status," said LP Aggarwal, general manager
(credit), Punjab National Bank.

Although the commerce department is yet to finalise what would
constitute the infrastructure sub-group, experts said the entire
processing area within the SEZ could be given infrastructure status. "As
per present norms, SEZ units must have a minimum 50% processing area,
which is entirely an infrastructure activity and not real estate," said
Lalit B Singhal, director general of the Export Promotion Council for
EOUs and SEZs.

http://www.financialexpress.com/fe_full_story.php?content_id=168889

Noose around SEZs tightened

2007-06-29T09:49:00.000-07:00

Purchases from domestic tariff area to be treated as imports

ARUN S & SUNNY VERMA
Posted online: Friday, June 29, 2007 at 0044 hours IST

NEW DELHI, JUN 28: The government is planning to treat 'certain' goods
purchased by special economic zones from the domestic tariff area (DTA)
as imports. This is aimed at preventing the misuse of tax incentives by
SEZs.
At present, these are treated as just purchases and not as imports. This
will force SEZ units to substantially increase exports to meet the net
foreign exchange (NFE) criterion specified in the SEZ Act.

The NFE requires SEZ units to export more than what they import over a
five-year period after production starts. Experts see it as a retrograde
step, which could jeopardise the entire operational flexibility
available to SEZs and reduce investment in such zones.

Government officials, however, said SEZ units would require to export a
major chunk of their production instead of selling it in the domestic
market. The finance and the commerce ministries have finally agreed on
treating purchases from DTA as imports. The SEZ Rules would be modified
soon, they said.

A government official said, after SEZ Rules changes were brought in,
"any supply from DTA to an SEZ unit —which results in benefits under the
Foreign Trade Policy—will be treated as imports, and hence liable for
export obligations."

Fresh Curbs
• Imports by SEZs Rs 1 crore
• Domestic buying by SEZs Rs 50 lakh
• Total procurement (import + domestic) Rs 1.5 crore
(As domestic procurement will now be treated as import)
• Value addition by SEZs (say 10%) Rs 15 lakh
• Total product value Rs 1.65 crore

Purchases where export-related benefits —the advance advance licence
scheme, duty entitlement passbook scheme, duty-free import entitlement
certificate and the duty drawback benefits—are availed of will be
treated as imports.

Experts said these changes would defeat the purpose behind setting up
SEZs—that of generating additional economic activity.

"It will affect their operational flexibility and further discourage
both backward and forward integration of SEZs with the domestic market,"
said Lalit B Singhal, director-general of Export Promotion Council for
export oriented units and SEZs. The finance ministry had earlier pointed
out that some SEZ units were selling goods in the domestic market
instead of exporting them— the main purpose of SEZs.

In fact, during a meeting of an empowered group of ministers on SEZs in
January, it was proposed that zones be denied tax benefits unless they
fulfilled their 50-70% export obligation. The fresh move is being seen
as a compromise formula between the finance ministry and commerce
department.

Proposed norms
• If domestic procurement is counted as imports, SEZs will have to
compulsorily export goods worth Rs 1.5 crore to meet the positive net
forex criterion
Current norms
• SEZs are entitled to sell domestically goods worth Rs 51 lakh and
required to export goods worth only Rs 1 crore to meet the positive NFE
criteria

http://www.financialexpress.com/fe_full_story.php?content_id=168569

BoArd not to be SEiZed of basics

2007-06-27T09:55:00.001-07:00

AMITI SEN

TIMES NEWS NETWORK[ MONDAY, JUNE 25, 2007 12:27:54 AM]

NEW DELHI: In a move that would expedite setting up and operationalisation of special economic zones (SEZ), the government has decided to allow developers to carry out a number of operations including building of roads and boundary walls as soon as the zones are notified without seeking the permission of the board of approvals (BoA) on SEZs.

Other operations such as setting up the manufacturing area, schools, shopping complexes and hospitals would, however, continue to require authorisation certification from the BoA.

Speaking to ET, commerce ministry sources said the BoA members, in their meeting on Friday, decided to identify a number of essential operations that could be allowed without government scrutiny. The operations identified for automatic clearance include setting up of roads, boundary walls and water and power distribution systems.

“It was recognised by all members that there were a number of default activities that had to be automatically allowed and should not require special permission. The activities will be mentioned in the minutes of the meeting that will be published soon,” an official said.

Other activities such as construction of the production area and building of shopping complexes, schools and hospitals would continue to require the BoA’s nod. “The activities falling within the processing and non-processing areas have to be monitored to ensure the given parameters are not breached,” the official said.

As per SEZ rules, the processing area for all SEZs cannot be less than 50% of the total area. The housing, schooling and other facilities have to be in proportion to the number of employees working in the SEZs.

With the relaxed authorisation rules, SEZ developers will now have the freedom to start putting in place the essential infrastructure as soon as they get their zones notified without waiting for the BoA to meet. “Developers will not have to bide time till the BoA decides to meet. Work can start as soon as the notification appears,” the official said.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/BoArd_not_to_be_SEiZed_of_basics/articleshow/2145716.cms

--
Sudarshan Rodriguez

Sudarshan Rodriguez,

Senior Research Associate,

Ashoka Trust for Research in Ecology

and the Environment (ATREE)

CHENNAI

Flat 2B, Aditya Apartments,

38 Balakrishna Road,

Valmiki Nagar, Thiruvanmiyur,

Chennai-600 041

Tamil Nadu, India.

Phone:+91 44 420 19470

Fax: +91 44 420 19468

BANGALORE

Ashoka Trust for Research in Ecology and the Environment

No 659, 5th ‘A” Main, Hebbal,

Bangalore 560024

Direct line: 080 - 65356130

Tel: +91 80 23533942, 23530069, 23638771

Fax: +91 80 23530070

Mobile: +91 9840680127

Email: sudarshanr@yahoo.com

Post- Tsunami Environment Initiative

(www.ptei-india.org)

You are not what you do , you do what you are

One's profession and career should be their hobby, passion and cause

States get 60-day deadline to clear SEZ proposals

2007-06-27T09:54:00.000-07:00

AMITI SEN

TIMES NEWS NETWORK[ WEDNESDAY, JUNE 27, 2007 03:19:08 AM]

A total of 339 SEZs have received formal approval so far, of which 126
have been notified. In all, Rs 35,145 crore has been invested in these
zones, which have created 32,578 direct jobs.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/States_get_60-day_deadline_to_clear_SEZ_proposals/articleshow/2152296.cms

'No forcible eviction from farmland for SEZs'

2007-06-23T11:30:00.001-07:00

IANS[ SUNDAY, JUNE 17, 2007 12:09:07 PM]

NEW DELHI: Displacement of people from land sought for special economic zones (SEZs) will be purely voluntary and no forcible land acquisition will be made, Rural Development Minister Raghuvansh Prasad Singh has assured.

Singh, whose ministry has a draft rehabilitation package ready for people who are displaced from their farmland to make way for SEZs, also assured that the compensation in such cases would be attractive and offered before acquisition.

"Even if the rehabilitation package is attractive, it fails to serve its purpose when the people start agitating and hold demonstrations," Singh, who personally fashioned the finer points of the package, told IANS in an exclusive interview.

"The policy seeks to end forcible acquisition of farmers' land. And in the case of agreed acquisition, the rehabilitation package will be awarded to affected people before displacement," added Singh, who has a doctorate in mathematics.

"The displacement should take place only when it is absolutely necessary and fully voluntary."

Piloted by the rural development ministry, the government proposes to enact a new law - Resettlement and Rehabilitation Act - and the relevant bill is being examined by the law ministry.

The government also proposes to amend the Land Acquisition Act to give the new law an overriding effect over the Land Acquisition Act and the Special Economic Zone Act.

The concept of SEZ, seen as a prime mover of the Indian economy, came under criticism after farmers opposed forced land acquisitions for such projects at many places across the country, especially in Nandigram in West Bengal where 14 people were killed in police action against protestors March 14.

In the freewheeling interview, Singh, 61, who represents the Vaishali constituency of Bihar in the Lok Sabha, said that his party, the Rashtriya Janata Dal (RJD), had started preparations to expand its base beyond its pocket borough in Bihar and Jharkhand with a nationwide ambition.

He said his party had won seats in the Manipur assembly and also has a presence in Maharashtra and West Bengal. "People in other states look up to the RJD. But so far we have ignored their aspirations," he said.

"The whole purpose was that the party should grow in strength all over the country. Only then we will be able to fight the communal forces," Singh said and added that the party was formed to empower minorities and the socially weak.

Singh also sought to play down criticism against his party chief and Railway Minister Lalu Prasad that he was ignoring his home state Bihar and spending too much time in New Delhi only to nurse his aspirations to become prime minister.

Even the decision to hold the national executive meeting of the party in the capital last week did not go down well with the cadre.

"All kinds of people keep making all kinds of speculations. This has nothing to do with any of that. What's wrong with holding it in Delhi? It is well connected to every corner of the country," Singh asserted.

"People from all over the country were coming for the national executive meet. So holding it in Delhi facilitated their travel. But the national convention will be held in Sarnath on Aug 25."

The rural development minister also justified his party's total endorsement of every action taken by the United Progressive Alliance (UPA) government and said everything was being done as per the national common minimum programme.

"We don't want to do anything that could weaken this alliance and strengthen the communal forces. We neither want to nor will do anything that would encourage communal forces."
http://economictimes.indiatimes.com/News/Economy/Infrastructure/No_forcible_eviction_from_farmland_for_SEZs/articleshow/2129013.cms

--
Sudarshan Rodriguez

Sudarshan Rodriguez,

Senior Research Associate,

Ashoka Trust for Research in Ecology

and the Environment (ATREE)

CHENNAI

Flat 2B, Aditya Apartments,

38 Balakrishna Road,

Valmiki Nagar, Thiruvanmiyur,

Chennai-600 041

Tamil Nadu, India.

Phone:+91 44 420 19470

Fax: +91 44 420 19468

BANGALORE

Ashoka Trust for Research in Ecology and the Environment

No 659, 5th ‘A” Main, Hebbal,

Bangalore 560024

Direct line: 080 - 65356130

Tel: +91 80 23533942, 23530069, 23638771

Fax: +91 80 23530070

Mobile: +91 9840680127

Email: sudarshanr@yahoo.com

Post- Tsunami Environment Initiative

(www.ptei-india.org)

You are not what you do , you do what you are

One's profession and career should be their hobby, passion and cause

Industrial zone planned in 9 SEZ villages

2007-06-23T11:29:00.002-07:00

GIRISH KUBER

TIMES NEWS NETWORK[ MONDAY, JUNE 18, 2007 12:57:46 AM]

MUMBAI: The Maharashtra government’s special land acquisition officer has recommended the removal of nine villages from the list of 45 earmarked for setting up the Maha Mumbai SEZ.

The official has contended that these villages have already been reserved by the government, in 2003, for a township and an industrial zone, and substantial investments have already been made for these purposes.

The officer’s report, a copy of which is with ET, states that large parts of land in these villages have been mortgaged to raise money for various industries. The report was submitted to the state revenue department in the second week of May.

The Maha Mumbai SEZ is promoted by the Reliance group. When contacted, the company spokesperson refused to comment.

These nine villages are among the 45 where the state government has served notices under Section 4 of the Land Acquisition Act 1894. The notices served last year are meant to seek suggestions/objections from landowners on the government’s decision to acquire their land for the SEZ. As per the procedure, the Section 4 notices were followed by personal hearing under Section 5 of the same Act. Under this, the state’s special land acquisition officer listens to every individual whose land is being acquired for the project.

While listening to the villagers, the officer discovered that the land has already been reserved in these villages. The SEZ Act allows taking over of land that has not been reserved for any other purpose. The officer, as per the procedure, has recommended the publication of notification in the government gazette. The government, however, is yet to act on it.
http://economictimes.indiatimes.com/News/Economy/Infrastructure/Industrial_zone_planned_in_9_SEZ_villages/articleshow/2129767.cms

--
Sudarshan Rodriguez

Sudarshan Rodriguez,

Senior Research Associate,

Ashoka Trust for Research in Ecology

and the Environment (ATREE)

CHENNAI

Flat 2B, Aditya Apartments,

38 Balakrishna Road,

Valmiki Nagar, Thiruvanmiyur,

Chennai-600 041

Tamil Nadu, India.

Phone:+91 44 420 19470

Fax: +91 44 420 19468

BANGALORE

Ashoka Trust for Research in Ecology and the Environment

No 659, 5th ‘A” Main, Hebbal,

Bangalore 560024

Direct line: 080 - 65356130

Tel: +91 80 23533942, 23530069, 23638771

Fax: +91 80 23530070

Mobile: +91 9840680127

Email: sudarshanr@yahoo.com

Post- Tsunami Environment Initiative

(www.ptei-india.org)

You are not what you do , you do what you are

One's profession and career should be their hobby, passion and cause

Congress to launch protest against Nandagudi SEZ

2007-06-23T11:29:00.001-07:00

PTI[ FRIDAY, JUNE 22, 2007 06:30:18 PM]

BANGALORE: Slamming the Karnataka government on the issue of acquisition
of land for special economic zones, the opposition Congress on Friday
said it would launch a protest from next month against the SEZ proposed
to be set up at Nandagudi on the city's outskirts.
It will chalk out an agitation programme, including protest rallies to
be staged in Bangalore urban and rural districts, at its legislature
party meeting to be held on July 3 or July 4, ahead of the assembly
session commencing from July 5.
"The BJP-JD-S coalition government is on a land acquisition spree to
help land developers," state Congress president M Mallikarjun Kharge
alleged at a press conference here.
The proposal to set up a SEZ on 1200-odd acres at Nandagudi in Hoskote
taluk, about 50 km from here, has drawn flak from farmers and Left parties.
Kharge alleged that the government was acquiring land in excess and the
allotted land was being sold to developers. He asked: "Is it a
pro-farmer government?"
Noting that his party was against "indiscriminate" acquisition of farm
land and "injustice" towards farmers, Kharge said it was not opposed to
development including industrial development.
He said there were clear-cut guidelines issued by the Centre against
acquiring farm land for SEZs and alleged that the government had been
violating them.
The government has clarified that it is not acquiring land for SEZs and
entrepreneurs will purchase land at the prevailing market rates.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Congress_to_launch_protest_against_Nandagudi_SEZ/articleshow/2141782.cms

Mukesh SEZs approved

2007-06-23T11:26:00.001-07:00

Mukesh SEZs approved

ECONOMY BUREAU
Posted online: Saturday, June 23, 2007 at 0021 hours IST

NEW DELHI, JUN 22: The Centre on Friday formally approved three special
economic zones (SEZs) promoted by Mukesh Ambani's Reliance Industries
Ltd (RIL) and one by his brother, Anil Ambani. These were among the 36
SEZs that were formally approved by the government and another nine that
obtained in-principle clearance.
The Board of Approval (BoA) gave its formal nod to the Mukesh
Ambani-promoted Navi Mumbai SEZ Pvt Ltd's proposals for projects related
to biotechnology (63.74 hectare), light engineering (179 hectare) and
pharmaceuticals (103.25 hectare) inMaharashtra. Another RIL proposal for
a 1,250-hectare multi-product SEZ would be considered at the next BoA
meeting on July 12, as it was earlier deferred following the revenue
department's objections on contiguity, lack of alternate access roads
for local villages and their disconnect with water bodies.

BoA chairman and commerce secretary GK Pillai said the promoters and the
Maharashtra government had already given their comments on the stalled
SEZ. The Maharashtra government has approved the project. Though RIL
initially planned a single SEZ in Navi Mumbai, sources said it later
decided to split the zone into four projects in order to bypass the
contiguity issue and avoid procedural roadblocks.

The BoA also gave its formal approval to the 18.26-hectare IT/ITeS SEZ
belonging to Anil Ambani's Reliance Infocom Infrastructure Pvt Ltd at
the Dhirubhai Ambani Knowledge City in Maharashtra.

The BoA gave its nod to the Foxconn-promoted 11-hectare electronic
hardware SEZ at Sriperumbudur in Tamil Nadu. The company supplies
hardware to Motorola and Nokia. Foxconn, which already has an SEZ, plans
to invest $400 million in the new project.

Green Signal
• RIL proposal for 1,250-hectare SEZ to be considered at July 12 BoA meet
• Anil Ambani's 18.26-hectare IT/ITeS SEZ in Maharashtra also approved
• Barring Bihar and the northeast, SEZs have been approved in all states
• SEZs with complaints of compulsory land acquisition would not be notified

The Centre also said state governments would undertake the acquisition
of land for SEZs only when all the affected landowners gave their
consent. Pillai told state government representatives that SEZs with
complaints of compulsory land acquisition would not be notified.

It was also clarified that to the extent possible, double-crop and
multiple-crop land should not be acquired.

"Now, barring Bihar and the northeast, SEZs have been approved in all
states. Bihar and the northeast have been left out as no application has
been received from those states," Pillai said.

Seven proposals were deferred, including two for multi-product SEZs by
Skil Infrastructure. The company did not meet the net worth requirement.
http://www.financialexpress.com/fe_full_story.php?content_id=167987

Government clears 36 SEZ proposals

2007-06-22T12:00:00.000-07:00

AGENCIES
Posted online: Friday, June 22, 2007 at 1323 hours IST
Updated: Friday, June 22, 2007 at 1328 hours IST

NEW DELHI, JUNE 22: The government panel on Special Economic Zones on
Friday cleared 36 proposals, including three zones jointly promoted by
RIL chief Mukesh Ambani and Anand Jain, while granting in-principle
approval to nine others.
The Board of Approval, which met here on Friday, also cleared Anil
Ambani group firm Reliance Infocomm's IT SEZ in Dhirubhai Ambani
Knowledge City in Maharashtra.

Among those that received in-principle approval was a multi-product zone
in Midnapore, which will be the first such in West Bengal.

The Mukesh Ambani-Anand Jain promoted projects that were cleared are
product specific zones -- biotechnology, light engineering and
pharmaceuticals -- and would cover an area of 346 hectare in Navi Mumbai.

Also to receive clearance was a hardware manufacturing SEZ promoted by
Foxconn, which plans to eventually scale up the zone's size to 100 hectare.
http://www.financialexpress.com/latest_full_story.php?content_id=167903

BoA meets today to take up 46 SEZs

2007-06-22T11:46:00.001-07:00

Posted online: Friday, June 22, 2007 at 0046 hours IST

NEW DELHI: Having cleared over 200 SEZ proposals, the BoA will on Friday take up 46 fresh cases that include those of RIL CMD Mukesh Ambani, Anil Ambani group's Reliance Infocom, DLF Ltd and GMR Hyderabad International Airport. IT, ITeS and biotechnology sectors dominate the list of projects awaiting the Centre’s nod, with as many as 23 proposals awaiting clearnace.
—PTI
http://www.financialexpress.com/fe_full_story.php?content_id=167838

--
Sudarshan Rodriguez

Sudarshan Rodriguez,

Senior Research Associate,

Ashoka Trust for Research in Ecology

and the Environment (ATREE)

CHENNAI

Flat 2B, Aditya Apartments,

38 Balakrishna Road,

Valmiki Nagar, Thiruvanmiyur,

Chennai-600 041

Tamil Nadu, India.

Phone:+91 44 420 19470

Fax: +91 44 420 19468

BANGALORE

Ashoka Trust for Research in Ecology and the Environment

No 659, 5th ‘A” Main, Hebbal,

Bangalore 560024

Direct line: 080 - 65356130

Tel: +91 80 23533942, 23530069, 23638771

Fax: +91 80 23530070

Mobile: +91 9840680127

Email: sudarshanr@yahoo.com

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Industrial zone planned in 9 SEZ villages

2007-06-21T06:52:00.001-07:00

GIRISH KUBER

TIMES NEWS NETWORK[ MONDAY, JUNE 18, 2007 12:57:46 AM]

MUMBAI: The Maharashtra government's special land acquisition officer
has recommended the removal of nine villages from the list of 45
earmarked for setting up the Maha Mumbai SEZ.

The official has contended that these villages have already been
reserved by the government, in 2003, for a township and an industrial
zone, and substantial investments have already been made for these
purposes.

The officer's report, a copy of which is with ET, states that large
parts of land in these villages have been mortgaged to raise money for
various industries. The report was submitted to the state revenue
department in the second week of May.

The Maha Mumbai SEZ is promoted by the Reliance group. When contacted,
the company spokesperson refused to comment.

These nine villages are among the 45 where the state government has
served notices under Section 4 of the Land Acquisition Act 1894. The
notices served last year are meant to seek suggestions/objections from
landowners on the government's decision to acquire their land for the
SEZ. As per the procedure, the Section 4 notices were followed by
personal hearing under Section 5 of the same Act. Under this, the
state's special land acquisition officer listens to every individual
whose land is being acquired for the project.

While listening to the villagers, the officer discovered that the land
has already been reserved in these villages. The SEZ Act allows taking
over of land that has not been reserved for any other purpose. The
officer, as per the procedure, has recommended the publication of
notification in the government gazette. The government, however, is yet
to act on it.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Industrial_zone_planned_in_9_SEZ_villages/articleshow/2129767.cms

BoA meet to decide Navi Mumbai SEZ’s fate

2007-06-21T06:51:00.003-07:00

GIRISH KUBER

TIMES NEWS NETWORK[ MONDAY, JUNE 11, 2007 02:41:33 AM]

MUMBAI/DELHI: The Centre has set June 20 as the deadline for the
Maharashtra government to spell out its stand on the finance ministry's
reservations over the proposed Navi Mumbai SEZ. Maharashtra chief
secretary Johny Joseph is holding consultations with some of the
stake-holders in the Navi Mumbai SEZ. "Discussions are being held with
inhabitants of the five villages falling within the proposed zone and
also with the Jawaharlal Nehru Port Trust (JNPT), which has staked claim
to some of the land in the zone," commerce ministry officials told ET.

A spokesman for Navi Mumbai SEZ — the firm setting up the SEZ — refused
to comment.The Centre wants the Maharashtra government to give
point-by-point reply to the concerns voiced by the finance ministry in
its report submitted recently. "The s tate government's views will be
discussed in the Board of Approval (BoA) meeting scheduled for June 22,"
said a commerce ministry official.

A team headed by Sanjeev Behari, commissioner-customs & exports, visited
some of the Navi Mumbai SEZ areas on May 21 to assess the ground situation.

The central team's report has resulted in the BoA deferring its decision
to clear the Navi Mumbai SEZ twice in the past. The BoA has also raised
the issue of land contiguity which relates to a major road cutting
across the SEZ site.

The Navi Mumbai SEZ, however, doesn't have land-acquisition related
issues as the state-run agency Cidco has already acquired the land for
the project.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/BoA_meet_to_decide_Navi_Mumbai_SEZs_fate/articleshow/2113118.cms

SEZ developers need to win farmers’ trust

2007-06-21T06:51:00.001-07:00

GIRISH KUBER

TIMES NEWS NETWORK[ FRIDAY, JUNE 08, 2007 02:37:19 AM]

MUMBAI: The union commerce ministry on Thursday told the Maharashtra
government that no land acquisition for SEZs shall be completed till
farmers "willingly withdraw their objections" or "give consent to the
compensation package" offered by developers.

The clarification, in response to a query from the Maharashtra
government, puts paid to all plans for forcible land acquisition
anywhere in the country for any SEZ. Specifically, in Maharashtra, this
development puts the brakes on the state government's plan to commence
acquisition of land on Friday in 29 villages of Raigad district for the
Mahamumbai SEZ being promoted by Reliance.

The plan was to acquire land under Section 6 (1) of the Land Acquisition
Act 1894. Specifically, the clarification from the Centre means that the
state can still go ahead with the formalities involved in the Land
Acquisition Act, 1894, but cannot complete the actual process of
transfer to the SEZ developer, without getting the farmers' consent.

Acquisition under Section 6(1) allows the state government to override
objections from holders of the land being acquired. Given that farmer
groups had submitted 18,000 objections and threatened to launch a
wide-scale agitation against the imposition of Section 6(1) in the
district, the state government cannot transfer land to SEZs without
violating the Centre's policy on the subject, reiterated by the Commerce
ministry on Thursday.

"Our communiqu# to Maharahtra government is mean to interpret the SEZ
policy which has been announced and hence shall be applicable all over
India," a senior commerce ministry official told ET.

The commerce ministry communiqu# to the state government categorically
states that no land transfer shall take place unless farmers willingly
withdraw their objections to SEZ or give their consent to the
compensation package announced by the developers.

Farmers in the state have been accusing the state government of
"coercive land acquisition" for private developers. Pune recently
witnessed violent farmer protests over electronic giant Videocon's SEZ.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/SEZ_developers_need_to_win_farmers_trust/articleshow/2107849.cms

Govt limits cap for SEZs to 5k hectare

2007-06-21T06:50:00.003-07:00

SIDHARTHA

TIMES NEWS NETWORK[ FRIDAY, JUNE 08, 2007 02:00:28 AM]

NEW DELHI: In a move that could dampen the spirits of those hoping for a
review of the 5,000 hectare ceiling on special economic zones, the board
of approvals (BoA) has rejected a proposal from government-run Kandla
Port Trust to set up an SEZ spread over 6,100 hectare in Gujarat.

Instead, it has asked Kandla Port Trust to develop the SEZ on 5,000
hectare land, in line with the cap fixed by the empowered group of
ministers (EGoM) headed by Pranab Mukherjee in April this year.

The decision has already been communicated to the port authorities who
are not pleased with the move. The shipping ministry and Kandla Port
Trust are of the opinion that the land has been lying with the port for
years and, unlike with other developers, there is no fresh acquisition.

The commerce ministry, which administers the SEZ policy, and the
shipping ministry are now expected to approach the EGoM to seek a
clarification on how the land ceiling should be applied. Based on the
ministerial panel's decision, the BoA will fix a policy which will
decide if the cap holds good for all SEZs or only for those that acquire
land after a stipulated date.

But Kandla's experience sets the precedent for the likes of Reliance
Industries and DLF which have planned the country's largest SEZs. The
Mukesh Ambani group intends to set up the Maha Mumbai SEZ and Reliance
Haryana SEZ that would be spread over 10,000 hectare each, while DLF's
proposed zone in Gurgaon, Haryana, is intended to cover 8,097 hectare.
Omaxe too has plans to build an SEZ on over 6,000 hectare land in Alwar.

On Tuesday, Reliance got a go-ahead from the BoA to start work on 440
hectare land in Haryana. While the company is hopeful of not just
acquiring 10,000 hectare as it had originally planned but also of
getting the government green signal for the multi-product zone, sources
in the government said there was no move to relax the 5,000 hectare
ceiling at the moment.

"Reliance or anyone else who has a permission to set up an SEZ can start
construction once they have land and the necessary approvals. But we do
intend to ask them to stop expanding the zone the moment they reach
5,000 hectare," an official said.

While officials at Kandla may not be pleased with the BoA decision, it
does help the port trust start work since it ends months of uncertainty.
The port trust's proposal was first held up since the home ministry
wanted to put it through a security check.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Govt_limits_cap_for_SEZs_to_5k_hectare/articleshow/2107812.cms

RIL's three SEZs listed for clearance

2007-06-21T06:50:00.001-07:00

PTI[ WEDNESDAY, JUNE 20, 2007 01:25:01 PM]

NEW DELHI: With the government still to clear their multi-product Navi
Mumbai SEZ, three other zones promoted by Reliance Industries Chairman
Mukesh Ambani and his close aide Anand Jain in the same area have been
listed for clearance at the Board of Approval's meeting on Friday.

"While we are awaiting response from the Maharashtra government on
objections of the Revenue Department on the 1,250 hectare multi-product
SEZ proposal in Navi Mumbai, three other product-specific zones in the
area will come up for approval," a highly placed source told media.

He said the three proposals are stand-alone single product SEZs spread
over 350 hectares of land.

Asked whether it was a move on the part of developers to overcome
contiguity issues in the Navi Mumbai SEZ, the official said these four
projects have been stand-alone proposals ever since the SEZ Act came
into force last year.

However, these zones were originally part of a single multi-product SEZ
mooted by SIDCO -- the original promoter of the Navi Mumbai project. But
after the new law came into force, its new promoter who had bought the
project from SIDCO decided to set up four zones there.

The multi-product SEZ in Navi Mumbai had run into difficulties following
objections from Revenue Department, which feared revenue leakage because
of a road passing through the zone. After examination, the department
gave it a clean chit as far as the issue of contiguity was concerned,
but raised other points.

The BoA had asked the promoters and the state government to respond to
the issues raised by the Finance Ministry. While the promoters have
replied, the Commerce Ministry is awaiting views of the state government.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/RILs_three_SEZs_listed_for_clearance/articleshow/2136396.cms

It's a taxing time for SEZ areas

2007-05-07T06:50:00.003-07:00

TIMES NEWS NETWORK[ SUNDAY, MAY 06, 2007 12:52:27 AM]

NEW DELHI: In a big blow to special economic zones (SEZs), states have
decided to levy taxes on goods consumed at non-processing areas in SEZs.
This will result in all supplies to non-processing areas of SESz ––
which essentially house the social infrastructure like schools,
residential premises, shopping complexes –– will attract taxes levied by
states like valued added tax (VAT), sales tax, octroi and entertainment
tax.

"The empowered committee is of the unanimous view that states should not
give any tax exemption in non-processing area of SEZs," chairman of the
Empowered Committee of state finance ministers, Asim Dasgupta, told
reporters after a meeting of the committee here on Saturday.

Till now, states had not made any distinction between processing area
where actual production takes place and non-processing area. "This would
mean that supplies like cement, steel required to build social
infrastructure in SEZs would now attract tax," said Mr L B Singhal,
director general of Export Promotion Council for EOUs and SEZs. Centre
has already decided to impose taxes on the non-processing area.

The Empowered Committee also decided to form a joint working group with
representatives of both state and central government to prepare a
roadmap for an unified goods and service tax. The working group will
give its report in four months. "GST will be a superior form for VAT. It
would bring down the tax load on goods and services. At the same time it
would be structured in the way that revenues of both centre and states
grow," Mr Dasgupta said. He said the committee would also travel to
countries which impose GST to study their models.

He said states have also decided to bring a common VAT return and audit
form. The form which will provide for some local considerations had been
prepared. a final view on its introduction would be taken after
interaction with trade and industry bodies. Giving details about VAT
revenue, he said collections of VAT implementing states in 2006-07 grew
by a 24% to Rs 86,249 crore compared to Rs 69,691 crore the previous year.

http://economictimes.indiatimes.com/News/Economy/Policy/Its_a_taxing_time_for_SEZ_areas/articleshow/2008198.cms

Govt to notify 100 more SEZs by March 2008

2007-05-07T06:50:00.001-07:00

PTI[ FRIDAY, MAY 04, 2007 06:30:32 PM]

LUDHIANA: The Centre has decided to notify 100 more special economic
zones by the end of this financial year, a top commerce ministry
official said.
"By the end of this year, we would be notifying 100 more SEZs," Commerce
Secretary G K Pillai told reporters here, adding of these, 40 would be
notified by the end of May.
Pillai said the government has so far formally approved 234 SEZs with an
expected investment of Rs 3,00,000 crore. Out of these, the Centre has
notified 100 SEZs so far, he said.
"The government expects to attract an investment of Rs 1,00,000 crore in
SEZ and provide employment to five lakh people by the end of this
financial year," he said.
During the last 15 months, such zones have attracted an investment of Rs
28,000 crore and create 27,000 jobs, he said.
Pillai, who was here to attend a meeting with exporters of Punjab,
Haryana and Chandigarh, said of 11 applications from Punjab, four have
been formally approved, while the remaining have been given in-principle
clearance.
Out of these four SEZs, Quark City and Ranbaxy are setting up two zones
in Mohali with an investment of Rs 4,500 crore and Rs 700 crore
respectively.
"Quark city would offer employment to 35,000 people while Ranbaxy would
offer jobs to 1,200 people," he said.

http://economictimes.indiatimes.com/News/Economy/Policy/Govt_to_notify_100_more_SEZs_by_March_2008/articleshow/2005083.cms

SEZ rows may get special umpires

2007-05-07T06:49:00.000-07:00

AMITI SEN & SUBHASH NARAYAN

TIMES NEWS NETWORK[ SATURDAY, MAY 05, 2007 02:01:53 AM]

NEW DELHI: Civil courts may be barred from taking up cases related to
compensation disputes arising out of land acquisition for special
economic zones (SEZs) and other industrial and public purposes.
According to the Land Acquisition (Amendment) Bill 2007 drafted by the
rural development ministry, a Land Acquisition Compensation Disputes
Settlement Authority (LACDSA) will be created in place of courts in each
state to look into such disputes. For inter-state projects, a similar
inter-state authority has been proposed.

The draft Bill also seeks to bar state governments from acquiring land
for private players by proposing that part VII of the existing Act
dealing with acquisition for companies should be omitted. The proposal
holds significance as the empowered group of ministers (eGoM) on SEZs
had recently barred the state governments from acquiring land for
private developers only for SEZ projects. It may be noted that there
were protests not only against land acquisition by the West Bengal
government for the Nandigram SEZ but also against the Tata's Singur
project, which was a non-SEZ.

The feasibility of the proposals will be examined in details by the
group of ministers on the relief and rehabilitation (R&R) policy to be
constituted soon. The PMO wants to seek the opinion of the GoM on the
entire revised policy drafted by the rural development ministry. The R&R
policy, when approved by the government, will lay down all parameters
guiding land transactions including benchmark prices and compensation to
oustees.

Laying down that land could be acquired by the government only for
public purposes, the amendment Bill defines public purpose narrowly to
include strategic purposes related to defence and any other work vital
to the state and public infrastructure such as electricity,
communication, mining, water supply and public facilities. For private
project related acquisitions, the onus would be on the companies to
acquire land directly.

However, an official source said that the new Act would allow some
flexibility to the state to acquire land for projects where about 90% of
land has already been purchased by the private developer. The draft
policy has also proposed that rehabilitation grant should be given to
displaced persons only in lieu of land or job. The proposed formula
calls for the acquirer to pay an average of the 'higher prices' paid in
50% of the land sold in the area in the previous three years. The
average pricing will be determined from land previously acquired for
industrial use

http://economictimes.indiatimes.com/News/Economy/Policy/SEZ_rows_may_get_special_umpires/articleshow/2005859.cms

Nath not in tune with FM on SEZ forex earning rule

2007-05-07T06:48:00.001-07:00

AMITI SEN

TIMES NEWS NETWORK[ MONDAY, APRIL 30, 2007 02:23:42 AM]

NEW DELHI: Determination of export obligation for units in SEZs is
proving to be a tricky issue for the government. While the eGoM on SEZs
had asked the finance and commerce ministries to examine the feasibility
of introducing an additional export obligation, the two ministries are
finding no meeting point on the issue.

The eGoM had said that in addition to the existing criteria requiring
SEZ units to be net foreign exchange earners, it should be examined
whether another obligation requiring units to export goods equal to the
value of inputs bought by them from the domestic tariff area (DTA)could
be imposed.

When an export obligation is imposed on a unit, it is committed to carry
out exports — depending on the level of obligation imposed — in return
for the various concessions. The finance ministry feels the current
export obligation requiring SEZ units to be net foreign exchange earners
is not enough to ensure adequate exports. The commerce ministry,
however, believes the net foreign exchange criteria should be enough
provided checks are introduced to rule out foul play.

Speaking to ET, commerce ministry officials said they realised the need
to prevent misuse of rules. One possible misuse could be that an SEZ
unit could set up a subsidiary in the DTA and source goods from it with
the DTA unit claiming concessions in lieu of the deemed exports made to
the SEZ unit.

To prevent such cases, the commerce ministry has suggested that in case
a DTA unit is fulfilling its export obligation by supplying goods to an
SEZ unit, the value of sales should be added to the SEZ unit's export
obligation. The finance ministry argues there could be units that are
not importing at all, and which would not have to export anything if the
export obligation is restricted to units being net foreign exchange
earners.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Nath_not_in_tune_with_FM_on_SEZ_forex_earning_rule/articleshow/1977192.cms

Number of notified SEZs cross 100

2007-05-07T06:47:00.000-07:00

PTI[ TUESDAY, MAY 01, 2007 07:00:46 PM]

NEW DELHI: Special Economic Zones of Bajaj Auto and Ranbaxy are among
the 37 SEZs notified since the freeze was lifted on April 5, taking the
total number to 100.
"As on May 1, a total of 100 of the 234 SEZs that had received final
approval, have been notified," a senior government official said.
These include SEZs of Bajaj Auto, Ranbaxy, Mahindra and Wockhardt, he said.
The official said in the coming six months 100 more SEZs from among
those who have final approvals would be notified.
According to sources, 50 SEZs are likely to become operational by July.
At present, only 19 zones that were set up after the SEZ Act 2006 are
functional.
So far, an investment of Rs 13,435 crore has been made in the SEZs and
18,457 jobs created.
They said if all the 234 SEZs with final approval become operational by
2009, they would attract investment of Rs 3,00,000 crore and create 40
lakh jobs.
Exports by units in SEZs this year is expected to touch Rs 67,300 crore
and could cross Rs 100,000 crore by 2009.
However, this figure is likely to exceed as the applications for setting
up more SEZs continue to flow in. At the last count, more than 350
proposals were pending before the Board of Approval.
Apart from fresh applications, around 162 cases with in-principle
approvals are pending before the Board.
In its meeting next week, the BoA will consider 19 proposals with
in-principle approval for granting final clearance.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Number_of_notified_SEZs_cross_100/articleshow/1985855.cms

Rehabilitation policy for SEZ-displaced likely to get delayed

2007-05-07T06:44:00.001-07:00

RURAL ECONOMY

Rehabilitation policy for SEZ-displaced likely to get delayed

Posted online: Monday, May 07, 2007 at 0000 hours IST

NEW DELHI, MAY 6: The much-awaited policy for mandatory rehabilitation
of land owners displaced by industrial projects and SEZs might get
delayed with the matter being referred to a group of ministers (GoM).
The Resettlement and Rehabilitation Policy has been drafted by the rural
development ministry in the backdrop of protests in Nandigram and Singur
in West Bengal and Raigad in Maharashtra.

While rural development minister Raghuvansh Prasad Singh had hoped that
an early clearance from the law ministry would pave the way for the
policy to be sent to the Cabinet for approval, the decision to refer the
matter to a GoM might put a brake on its passage in the ongoing
Parliament session.

The law ministry is understood to have completed the final draft of the
rehabilitation package which comprises an amended Land Acquisition Act,
a rehabilitation policy and a rehabilitation law.

The GoM is expected to look into several critical aspects of the issue
like having an independent arrangement for out of court settlement of
small issues involved in land acquisition or having an independent
tribunal to deal with such cases.

It will also look into the proportion of land which the government can
acquire for setting up industrial projects.

After the protests, an empowered GoM on SEZs headed by external affairs
minister Pranab Mukherjee put a end to compulsory land acquisition for
these zones and also fixed a limit of 5,000 hectares on their size.
Changes in land acquisition laws are expected to put an end to
compulsory land acquisition for industrial projects.

—PTI

http://www.financialexpress.com/fe_full_story.php?content_id=163377

Are SEZ curbs thwarted?

2007-04-27T11:40:00.003-07:00

TIMES NEWS NETWORK[ THURSDAY, APRIL 26, 2007 03:47:28 AM]

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
http://economictimes.indiatimes.com/News/Economy/Policy/Are_SEZ_curbs_thwarted/articleshow/1955883.cms

TN moves to revive Nanguneri SEZ

2007-04-27T11:40:00.001-07:00

V HEMAMALINI

TIMES NEWS NETWORK[ FRIDAY, APRIL 27, 2007 06:40:11 PM]

CHENNAI: The Tamil Nadu government is seeking to revive the proposed SEZ
project at Nanguneri in Tirunelveli, the foundation stone for which was
laid six years ago. The state government, which has moved the Centre for
an early clearance by the commerce ministry, is keeping its fingers
crossed for a quick closure.

"We hope to get the approval by May 9 when the Board of Approval (BOA)
is scheduled to meet. The construction work would begin subsequently.
One by one various state proposals are being given due attention,"
sources close to the developments added.

One other major hurdle that appears to have been overcome is that
US-based INFAC group, the main promoters, have been able to rope in the
AMR group of Hyderabad as a new partner. Alongside, formalities to
attain the multi-product status has also now been completed, sources
told ET.

Conceived in 2001, this SEZ in a backward district was the pet project
of the former union commerce and industry minister, late Murasoli Maran.
The foundation stone for it was laid with much fanfare during the
previous DMK regime.

However, the project was put on the backburner during the subsequent
AIADMK regime. Political compulsions apart, the project hit a roadblock
when the US-based INFAC, the main promoter, was unable to achieve
financial closure. Subsequent efforts to bring in a Kolkata-based
promoter also fell through.

INFAC jointly promoted the SEZ along with the Tamil Nadu Industrial
Development Company (TIDCO) through a special purpose vehicle, Advanced
Technologies Manufacturing and Assembly (ATMAC).

The US group has managed to bring in the new partner after completing
the process of acquiring 400 acres of the 2,500 acre multi-product
specifications.

"The master plan has been completed by the Jurong Town Corporation of
Singapore," the sources said, adding that an investment of over Rs 600
crore would be needed to create the infrastructure.

Noting that the surge of investments into Tamil Nadu has prompted the
government to revive the stalled SEZ project, sources said the SEZ,
about 500 km from Chennai, once operational, would have a dedicated
telecommunication infrastructure, including a fibre optic network,
digital switching and a satellite earth station.

The SEZ would house light engineering firms, precision engineering
companies, pharma majors and electronic hardware and chip design
manufacturers and is also expected to attract major hi-tech industries
and those promoting clean environment technology.

http://economictimes.indiatimes.com/News/Economy/Policy/TN_moves_to_revive_Nanguneri_SEZ/articleshow/1968240.cms

IT companies utilising SEZs well

2007-04-27T11:37:00.000-07:00

PTI[ FRIDAY, APRIL 27, 2007 08:50:44 AM]

CHENNAI: IT companies are making maximum utilisation of Special Economic
Zones (SEZ) but were unable to employ local people, a top official of
the National Manufacturing Competitiveness Council said here today.

As much as 60 per cent of lands allotted for SEZs were being utilised by
IT companies, the council's chairman V Krishnamurthy, he said delivering
a lecture on `Inclusive Growth of the Indian Economy' on the 54th
Anniversary of the Triplicane Cultural Academy here.

"One of the aims of setting up SEZ in an area is to provide employment
opportunities for local people, which is hardly done by the IT
companies," he said.

Only manufacturing companies could do that, he added and called for
increased investment in manufacturing.

Ruing a lack of comprehensive investment in some of the `key industries'
like leather and textiles, Krishnamurthy called for FDI in the textile
sector.

Further, stating that there was a `mismatch of available resources and
the demand for skilled labour,' Krishnamurthy blamed the lack of enough
ITIs in the country.

The Council had suggested the Human Resources Development ministry to
set up more training institutes.

India required as many as 25 lakh skilled labourers a year, but only
around 8 lakh were available, he said.

Further, the country's ambition of reaching 14 per cent growth rate was
achievable, he said.

"However, it has to be sustained through the next decade," he added.
http://economictimes.indiatimes.com/News/Economy/Infrastructure/IT_companies_utilising_SEZs_well/articleshow/1962751.cms

Law soon for rehabilitation before SEZ land acquisition

2007-04-18T07:39:00.000-07:00

Monday April 16 2007 02:08 IST
IANS

NEW DELHI: Facing protests over land acquisition for setting up Special
Economic Zones (SEZs), the government is considering to enact a law
making it mandatory for industries to rehabilitate the displaced people
before developing projects.

Piloted by the Rural Development Ministry, the Resettlement and
Rehabilitation (R&R) Bill is currently being examined by the law
ministry, said sources from the two ministries.

"We have a two-pronged strategy. Besides enacting a new R&R Act, the
Land Acquisition Act too would be amended to give the new law an
overriding effect over the Land Acquisition Act and the Special Economic
Zone Act," said a Rural Development Ministry source.

Earlier this week, Rural Development Minister Raghuvansh Prasad Singh
had said his ministry's relief and rehabilitation policy would soon go
to the cabinet.

Singh indicated that compulsory land acquisition for industrial projects
including Special Economic Zones would not be allowed "at any cost" in
the policy. He said his ministry "would ensure that the interests of
farmers are protected".
http://www.newindpress.com/NewsItems.asp?ID=IEH20070415154707&Page=H&Title=Top+Stories&Topic=0&aDate=4%2F16%2F2007

Reliance hopes new SEZ guidelines are not final

2007-04-18T07:37:00.000-07:00

DATELINE

NEW DELHI, APR 16: Days after the government limited the size of special
economic zones (SEZs) to 5,000 hectares, Reliance Industries has said
the revised rules may not be final.
"We will go to the government, we will place our ideas with them, and we
are sure that they will change their mind," RIL director Anand Jain, who
also heads Reliance's SEZ venture, said in an interview aired on Monday
by private news channel.

RIL, which is developing massive SEZ projects in Maharashtra and
Haryana, was the hardest hit after an empowered group of ministers
(eGoM) on April 5 decided to put a 5,000 hectares cap on the size of SEZs.

The size of both the Maha Mumbai SEZ and multi-product SEZ near Gurgaon
proposed by RIL exceeded the land limit. According to the channel, Jain
insisted that Reliance would not get around the revised rules to proceed
with its SEZ plans and said that he does not consider these rules as final.

"I am sure this is not final. There is much more to come. This is a
policy that is evolving. We have had an incident, Nandigram. This is an
instant reaction to this," he said.

While reacting to the government's decision to distance itself from
acquiring land for SEZs, he said: "The government cannot have it both
ways. They cannot insist on the SEZ being on contiguous land and then
refuse to get involved..."

When asked how RIL would acquire land in the face of protests by farmers
and activists, he told the channel that the compensation package to
farmers will be like a lottery.

http://www.financialexpress.com/fe_archive_full_story.php?content_id=161327

Ambani turf war spills over to Maha SEZ

2007-04-18T07:35:00.000-07:00

ANUPAMA AIRY
Posted online: Wednesday, April 18, 2007 at 0000 hours IST

NEW DELHI, APR 17: The turf war between the Ambani brothers doesn’t seem to end. This time it’s about Mukesh Ambani-led Reliance Industries Ltd’s (RIL’s) plans to set up two gas-based power plants for the special economic zone (SEZ) in Maharashtra.
In strongly worded letters to the central and state governments, the Anil Ambani-controlled Reliance Energy Ltd (REL) has alleged that such a move by RIL amounts to breach of the non-competition agreement entered into between the brothers prior to the reorganisation of the Reliance group.

“The proposal of RIL to set up power facilities for the commercial units and residents of SEZs is in clear violation of the non-competition understandings and amounts to harming the interests of millions of shareholders of Anil D Ambani group. Similarly, supply of surplus power by RIL (after meeting its captive needs) to state-owned utilities was also not allowed under the non-competition agreement,” REL said in its letter to Maharashtra chief minister Vilasrao Deshmukh.

In a similar letter to A Raja, minister of environment & forests, REL said, “RIL may be or might have approached you for developing captive generation facilities. RIL’s intent to set up a power plant in excess of captive requirement is a clear breach of trust of the de-merger agreement.”

REL’s letter further said that such proposals, discussed by RIL’s chairman & managing director, Mukesh Ambani, go far beyond the scope of RIL’s business, as agreed to under the de-merger scheme of the Reliance group.

http://www.financialexpress.com/fe_full_story.php?content_id=161502

--
Sudarshan Rodriguez

Sudarshan Rodriguez,

Marine Conservation Analyst

Project Coordinator,

Post- Tsunami Environment Initiative

(www.ptei-india.org)

Flat 2B, Adithya Apartments,

38 Balakrishna Road,

Valmiki Nagar, Thiruvanmiyur,

Chennai-600 041

Tamil Nadu, India.

Phone:+91 44 420 19470

Mobile: +91 9840680127

Fax: +91 44 420 19468

Email: sudarshanr@yahoo.com

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India open to reviewing land ceiling on SEZs: Nath

2007-04-18T07:34:00.000-07:00

Posted online: Wednesday, April 18, 2007 at 0000 hours IST

BEIJING, APR 17: The government is open to changes in the 5,000 hectare
ceiling for special economic zones (SEZs) which was decided at a meeting
of an empowered group of ministers about two weeks back.
"We have a broad parameter. If there are any specific or area-specific
issues, which do not have any controversy, of course we will look at it
(the ceiling) in certain conditions," commerce minister Kamal Nath said
here.

"This is not the Gita or the Bible. No?," Nath said when asked whether
the government would have a re-look into the land ceiling policy for
setting up the special economic zones.

Nath's remark comes a day after Reliance, whose two projects would be
impacted by the ceiling, said the government would rethink its stand.

"I am sure this is not a final no. There is much more to come... .. We
will go to the government, we will place our ideas with them, and we are
sure they will change their mind," Reliance's SEZ group head Anand Jain
told a TV channel.

The agreement to limit the size of special economic zones was the one of
the major factors leading to lifting the freeze on these zones that was
in place since January.

The limit was expected to put to rest controversy surrounding land
acquisitions for special economic zones.

—PTI

http://www.financialexpress.com/fe_full_story.php?content_id=161458

SEZ to come up at Tiruchy

2007-04-18T07:33:00.001-07:00

SEZ to come up at Tiruchy
Wednesday April 18 2007 11:12 IST
TIRUCHY: In a move expected to transform Tiruchy into a strategic
industrial hub, a proposal has been sent to the Centre for setting up a
special economic zone in Tiruchy, right at the site identified for the
IT Park at Navalpattu on the outskirts of the city.

The 125 acre SEZ would house the IT Park in 10 acres, according to the
proposal sent to the Centre by Electronics Corporation of India (ELCOT).
In fact, ELCOT has sought for four more SEZs, two to be set up at
Madurai and one each at Salem and Madurai, apart from Tiruchy.

While the SEZs at Madurai are proposed at Ilandaikulam on an area of 28
acres and at Vadapazhanji on 213 acres, the Salem SEZ would come up on
an area of 160 acres in Ammapettai and at Gangaikondan in Tirunelveli -
on 125 acres. The proposalsz were sent on April 5, said ELCOT MD
Umashankar and hoped that there would not be any problem in getting the
nod from the Centre.

As far as the IT Park in Tiruchy is concerned the work is progressing
smoothly, except for the fact that no big players have so far evinced
their interest to set up shops. Though they are convinced about the
infrastructure here, the talks are more oriented towards the cost they
have to incur for setting up their units in the IT park. Sources said a
dozen companies have decided to establish themselves at the park, while
negotiations are still on.

Tenders are likely to be called for drafting the master plan for the
park, elaborating on the roads, streetlights and water supply needed for
the park. Apart from the 136 acres already in possession of ELCOT,
acquisition of an additional 100 acres, sought by ELCOT for Phase II of
the project, would soon begin. The acquisition is in its preliminary
stage, said Collector Ashish Vachhani.
http://www.newindpress.com/NewsItems.asp?ID=IET20070418005042&Title=Southern+News+%2D+Tamil+Nadu&rLink=0

SEZ labour laws: TUs for talks with Centre

2007-04-13T11:30:00.001-07:00

ECONOMY BUREAU
Posted online: Friday, April 13, 2007 at 0110 hours IST

KOLKATA, APR 12 : Central trade unions want to have a discussion with
the Centre to settle the contentious issue of creating separate labour
laws for the special economic zones (SEZs).
The central trade unions, which were opposed to two different sets of
labour laws earlier - one for the SEZs with less rights and regulations
and the other for non-SEZs with constitutionally guaranteed rights-have
now demanded for a national convention to arrive at a consensus.

The Centre of Indian Tarde Unions (CITU) recently said it would oppose
any move on the part of the central government to delegate the power to
the development commissioner of the SEZ to manage labour isuues.

Union labour minister Oscar Fernandes on Thursday said after a
convention on employment generation organised by the Federation of
Indian Chambers of Commerce & Industry here that the government has
decided not to act unilaterally. "We will talk to the state governments
and trade union bodies before taking any decision on labour laws in the
SEZs. Till then, all the existing laws will be in force in the SEZs."

All the central trade unions have opposed the move by the Centre to
dilute the exisiting labour laws.

The country's largest trade union body, Bharat Mazdoor Sabha (BMS),
which is close to the Bharatiya Janata Party's political understandings,
has said it would come up with a demand for fresh rounds of meeting on
the issue. Said Girish Awasti, presidernt of BMS, "Along with other
central trade unions, we will raise the demand for a convention during
the national trade union meet to be held from April 27-28."

Awasti said the BMS, having one crore members, was opposed to any
relaxation in labour laws.

G Sanjeeva Reddy, president of the Indian National Trade Union Congress,
the second largest trade union in the country, also favours fresh
discussions. "We will not allow dilution of working hours and the social
security system for workers inside the SEZs. There can't be two sets of
labour laws in the country."

http://www.financialexpress.com/fe_full_story.php?content_id=161008

DLF may go in for twin SEZs in tune with new laws

2007-04-10T11:29:00.001-07:00

DLF may go in for twin SEZs in tune with new laws

PTI[ FRIDAY, APRIL 06, 2007 08:22:29 PM]

New Delhi: Faced with the new rule on special economic zone that limit
the maximum area to 5,000 hectares, India's largest real estate player
DLF may split its proposed mega zone in Haryana into two tax free
enclaves in the region.
"We have just started the process of acquiring the land. Now, there will
be one SEZ of 5,000 hectare but if we get more land, we may set up
another SEZ of 3,000 hectare in Gurgaon," a senior company official said.
DLF had proposed a multi-product SEZ in Gurgaon covering over 8,000
hectare. However, the Centre on Friday decided to fix a ceiling of 5,000
hectare for multi-product SEZs. Such zones earlier required a minimum of
1,000 hectare but there was no upper limit.
The Empowered Group of Ministers, which decided on new rules, did not
specify whether promoters would be allowed to build two SEZs in a
contiguous area.
DLF, which has already filed draft red herring prospectus for its
proposed IPO, would also rework its investment plan in the wake of SEZ
rules. The official said in case the company was allowed only one SEZ,
its planned investment would come down by at least Rs 4,000 crore.
Another real estate firm Omaxe, which planned an SEZ on over 6,000
hectare would also 'go back to the drawing board' to chalk out the new
strategies.
But the company maintained that as of now it would go ahead with SEZ
plan even though the size has been curtailed. Incidentally, Omaxe also
is in process of launching an IPO to raise Rs 1,500 crore.
Both the realty firms may also inform market regulator SEBI about
changes in their SEZ plans.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/DLF_may_go_in_for_twin_SEZs_in_tune_with_new_laws_/articleshow/1867494.cms

SEZ export obligation to attract tighter vigilance

2007-04-10T11:28:00.002-07:00

AMITI SEN & DEEPSHIKHA SIKARWAR

TIMES NEWS NETWORK[ MONDAY, APRIL 09, 2007 02:00:50 AM]

NEW DELHI: The introduction of export obligation for units operating
within SEZs equivalent to the purchases made by them from the domestic
tariff area (DTA) will call for more paperwork for units and stricter
vigilance on the part of the revenue department to ensure compliance.

Earlier, SEZ units were supposed to be only net foreign exchange
earners. The additional obligation, introduced by the empowered group of
ministers on SEZs last week, will now also require units which were
earlier not obligated to export, to compulsorily undertake exports and
maintain two balance sheets to account for their sales in the domestic
market and the international market.

A number of SEZs, especially those in the IT and IT-enabled services
sector like the Nokia SEZ in Sriperembudur, have no intentions to export
till date.

Going by the earlier rules, Nokia's production unit had no obligation to
export as it was not sourcing anything from the international market.
However, under the new rules, it will compulsorily have to export
products at least equivalent to the value of the inputs sourced by the
unit from the domestic market or the DTA. Speaking to ET, official
sources clarified that now all SEZ units will have to separately show
their sales in the domestic market and the international market.

The increased export obligation will also require the revenue department
to tighten vigilance. Since SEZ units are to get tax exemptions on the
profits made from exports and not from their sales in the DTA, there are
chances that units show a more robust balance sheet with regard to
exports and show a lean balance sheet for sales in DTA to claim larger
exemptions.

To prevent any misuse, transfer pricing (TP) provisions would come handy
here for the revenue department, officials said.

The principle ensures that prices in the transaction are equivalent to
what they would have been, had the parties involved in the transaction
not been related to each other.

The department is already strengthening its TP cell to deal with large
number of SEZs.

Interestingly, China has also made effective use of TP norms in a
comprehensive way in SEZs in the country

http://economictimes.indiatimes.com/News/Economy/Infrastructure/SEZ_export_obligation_to_attract_tighter_vigilance/articleshow/1876580.cms

SEZs are like the Curate’s egg: Good in parts

2007-04-10T11:28:00.001-07:00

MYTHILI BHUSNURMATH

TIMES NEWS NETWORK[ MONDAY, APRIL 09, 2007 02:18:59 AM]

A little over 30 years ago, there were 80 special economic zones (SEZs)
in 30 countries generating about $6 billion in exports and employing
about one million people. Today, there are more than 3,000 SEZs in 120
countries and they account for over $600 billion in exports and 50
million direct jobs.

By offering privileged terms, they attract investment and foreign
exchange, spur employment, and boost the development of improved
technologies and infrastructure. Despite their appeal, SEZs have been
criticised on the grounds of attracting investment only by offering
distortionary incentives rather than building underlying competitive
conditions.

It is argued that these incentives create a fiscal burden on the
taxpayer and hurt environmental and labour standards. In the eyes of its
critics, the direct and indirect costs of SEZs do not benefit the rest
of the economy and, instead, lead to enclaves of prosperity.

To its proponents, however, SEZs are a potent means of ensuring greater
employment and prosperity. Provided care is taken to ensure active
linkage programmes and adequate social and environmental safeguards,
they argue that private sector involvement in SEZ development and
operation can go a long way to ensure the benefits of SEZs are
maximised. SEZs, they claim, must be seen in the context of an overall
strategy to promote private sector-led growth, rather than as a
substitute for a good investment climate.

What has been the global experience with SEZs? Are they useful in
promoting private investment-led economic growth? What measures can
governments take to ensure that SEZs benefit the rest of the economy
through linkages? Why are some SEZs more successful than others? Do zone
ownership and management structures play a key role? Do SEZs promote
liberalisation or just give the illusion of an improved investment climate?

In the light of the on-going furore over SEZs in India it might be worth
re-visiting the debate. Unfortunately, close to half a century after
SEZs were first envisaged as a short-cut to speedy growth, the jury is
still out on whether these enclaves of excellence are really the way to
go. That lacuna, however, is partly made up by a World Bank sponsored
on-line discussion on SEZs, moderated by James Crittle and Gokhan
Akinci, that summarises the position as far as the debate on SEZs is
concerned.

Continued...1|2|3|Next >>

http://economictimes.indiatimes.com/News/Economy/Infrastructure/SEZs_are_like_the_Curates_egg_Good_in_parts/articleshow/1876609.cms

Forget size, dozens of IT SEZs go ahead with plans

2007-04-10T11:27:00.003-07:00

SUDIPTO DEY

TIMES NEWS NETWORK[ MONDAY, APRIL 09, 2007 02:49:22 AM]

NEW DELHI: Size does not seem to matter for the developers of IT SEZs.
Unperturbed on the brouhaha over size of multi-product SEZs, many
developers of IT SEZs are going ahead with their plans and at least two
dozens of them are likely to hit the street over the next 12-18 months.
And the early birds are looking at commanding a premium in the lease
rentals.

One of the new ones to jump onto the bandwagon is Mumbai-based Royal
Palms Estates, which is setting up an IT/ITeS SEZ spread over 25 acres,
with projected development cost of around Rs 650 crore over the next
three years. While many IT SEZs are targeting large users — with minimum
leased space requirement of 50,000 square feet — Royal Palms plans to
devote substantial chunk of space to small users whose demand may
typically vary from 2,000 sq feet to 50,000 sq feet. "Not many are
targeting smaller users, who would not mind paying a premium to be part
of an SEZ, which is within city-limits," said Dilawar Nensey, joint
managing director, Royal Palms Estates.

Another IT SEZ coming up in Mumbai is the one being developed by
Hiranandani Builders at Powai. Sources in real estate market said IT
major TCS have already booked over 60% of the space in the Powai SEZ.

Analysts point out that larger users of office space generally prefer to
position themselves on the outskirts of cities, where rentals are much
lower, while smaller users tend to stay closer to city-centres.
Typically, large users are able to bargain harder for lower rentals,
while smaller ones end up paying premium for the space.

As per industry estimates of the 140-odd IT/ITeS SEZs approved by the
central government, at least 25-odd such SEZs should be up and running
by end-2008.

While the uncertainty over extension of the STPI scheme beyond 2009 may
give some SEZs edge in marketing themselves to new players entering the
space, existing players who currently operate under the scheme are
keeping their expansion plans flexible. "Many corporates, who are used
to plan their office space needs three years in advance, are now just
looking at their requirements for the next 18 to 24 months," points out
Ankur Srivastava, MD, DTZ India, a real estate consultancy firm.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Forget_size_dozens_of_IT_SEZs_go_ahead_with_plans/articleshow/1876657.cms

State’s SEZ plans go for a six

2007-04-10T11:27:00.001-07:00

GIRISH KUBER

TIMES NEWS NETWORK[ MONDAY, APRIL 09, 2007 03:28:52 AM]

MUMBAI: The new rules guiding the special economic zones (SEZ) may put a
question mark on six sanctioned projects in Maharashtra, home to the
largest number of SEZs.

The empowered group of ministers had on Thursday stopped state
governments from acquiring land for SEZs promoted by private players.
The rules are applicable to SEZs cleared after February 10, 2006.

This means states will not be able to fulfil the promise of ensuring
cost-effective land acquisition for the SEZs cleared after the
cut-off-date. The developers will now have to buy land directly at
market price without any support from state governments.

Of the 72 SEZs proposed in Maharashtra, government agencies are involved
in as many as 24. Of these, 18 may not face any hurdle since they were
cleared before the cut-off-date. "We don't know what will happen to the
remaining six," a top official from the industry ministry said. The SEZs
in question are promoted by Bharat Forge, in Khed near Pune (5,000
acres); Mahindra Gesco, near Pune (2,700 acres); Videocon, one in
Aurangabad (5,000 acres) and another in Pune (2,500 acres); Supreme
Petro, in Raigad(250 acres); and the Reliance Group, the Maha Mumbai SEZ
near Mumbai (35,000 acres).

The Maharashtra Industrial Development Corporation (MIDC) is a partner
in five of these projects except that of Reliance. "We have joint
venture agreements in place for these five SEZs. What will happen to
them in the wake of the eGoM order, we don't know. We will have to wait
for some clarity on the issue," an MIDC official said.

For Maha Mumbai SEZ, the state government had chipped in by invoking the
Land Acquisition Act 1894. "Henceforth, the company will have to go out
on its own to acquire land," a state official associated with the
exercise said.

Though the company has announced plans to buy land directly from
farmers, the state government's decision to impose Section 4 (1) of the
Act virtually froze the land for any other purpose. The Section 4(1)
arms state governments with the power to notify any land they want for
'public purpose'. Once imposed, the section is valid for 12 months.
After the Centre's direction to state governments to stay clear of land
acquisition, the validity of the section is uncertain.

When contacted, the spokesperson for Maha Mumbai SEZ refused to discuss
the issue. State government officials said first they have to get the
Centre's order. "By Tuesday, we expect to receive a copy of the order,"
said a government official.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/States_SEZ_plans_go_for_a_six/articleshow/1876779.cms

Stricter obligations for SEZs on cards to boost exports

2007-04-10T11:26:00.000-07:00

DEEPSHIKHA SIKARWAR & AMITI SEN

TIMES NEWS NETWORK[ TUESDAY, APRIL 10, 2007 03:11:21 AM]

NEW DELHI: To ensure that the much-touted special economic zones (SEZ)
actually become vehicles for boosting exports, the revenue department is
pitching for a review of the net foreign exchange criterion to make it
more stringent.

There are 15 instances where supplies from SEZs to the domestic tariff
areas (DTA) are considered deemed foreign exchange earning under the
existing SEZ rules. The revenue department wants the list to be
shortened as it feels that SEZs should be undertaking actual exports to
meet the export obligation.

The commerce department, however, holds a contrary view. It feels there
is no problem with the existing classification and there was no need to
change it. "These are widely-accepted norms and the classification for
foreign exchange earning for SEZs is similar to that of EoUs," an
official said. The issue, however, is expected to be taken up at the
next EGoM meeting.

SEZ units are required to be not only net foreign exchange earners but
under the expected new guidelines, their exports would also have to be
more than whatever they source from the DTAs.

The revenue department is of the view that since the zones have been
given huge tax benefits, the emphasis should be on actual physical
exports being more than imports, an official said. The zones should not
rely on deemed exports to achieve their net forex earner status.

The official said the objective behind setting up the zones was to boost
exports from the country and garner a larger share of the world market,
and this could be done if the focus remains on physical exports. The
department wants pruning of certain deeming provisions that have been
spelled out in the rules.

Supplies from the SEZs to the DTA are considered as foreign exchange
earnings for 15 specified cases including goods sold under various duty
exemption schemes of the commerce department, viz, the export promotion
capital goods scheme and the advance licence scheme, supplies are made
for various government-recognised projects and supply of IT agreement
items under notified zero duty telecom and electronic items.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Stricter_obligations_for_SEZs_on_cards_to_boost_exports/articleshow/1882708.cms

Govt lifts ban on SEZs but ruins big dreams

2007-04-10T11:25:00.001-07:00

TIMES NEWS NETWORK[ FRIDAY, APRIL 06, 2007 02:15:41 AM]

NEW DELHI: The government has overhauled its policy on special economic
zones (SEZs), making large, multi-product SEZs virtually impossible to
build.

The empowered group of ministers (eGOM) headed by foreign minister
Pranab Mukherjee, which met in the political shadow of the Nandigram
violence, on Thursday lifted the freeze on approving new SEZs but
changed several parameters to make the policy more acceptable.

As per the new norms, the size of an SEZ cannot exceed 5,000 hectares
(12,500 acres). Earlier, there was only a lower limit of 1,000 hectares
for multi-product SEZs. Now, state governments can impose a lower
ceiling, if they want to. More importantly, state governments can no
longer acquire land for a special economic zone on behalf of private
developers; nor can state governments form joint ventures with private
developers if they do not already have land in possession to offer the
project. States can acquire land to develop SEZs on their own, provided
they stick to the new relief and rehabilitation package to be announced
soon.

Also, at least 50% of the total area in an SEZ has to be earmarked for
processing units. Earlier, the norm was 35% for multi-product SEZs and
50% for sector-specific SEZs. SEZs will also have tougher export
obligations to meet—instead of being merely net foreign exchange
earners, they will have to have export earnings at least equivalent to
their purchases from the domestic tariff area.

While the ceiling of 5,000 hectares on SEZs will presently affect the
plans of just a handful of SEZs, the biggest challenge for private
developers lies in acquiring large tracts of land meeting all contiguity
norms without government help. Developers of large projects were banking
on state governments, who have the power to take over land for
industrial projects, to acquire tricky bits of land.

Speaking to ET, senior commerce ministry officials said the Centre has
decided to give states the authority to cut down on the size of the SEZs
further in response to representations from a number of parties,
including the Left, on the need to fix lower limits. "If states deem
fit, they can even fix the ceiling at 1,000 hectares. The Centre doesn't
have any problems regarding that," an official said.

With the Nandigram fiasco resulting in the loss of several lives and
protests against forcible land acquisition gathering steam in
Maharashtra, the eGoM decision to debar states from acquiring land for
private players is clearly aimed at avoiding more violence.

http://economictimes.indiatimes.com/News/Economy/Policy/Govt_lifts_ban_on_SEZs_but_ruins_big_dreams/articleshow/1862910.cms

BoA may resume SEZ clearances next month

2007-04-10T11:24:00.001-07:00

TIMES NEWS NETWORK[ FRIDAY, APRIL 06, 2007 03:45:05 AM]

NEW DELHI: The frustration of a number of late entrants joining the SEZ
bandwagon is expected to come to an end when the board of approvals
(BoA) for SEZs meets during the middle of next month. Projects in the
initial stages would find progress in their multi-stage clearance once
the BoA meets around May 15, officials said. The BoA has not been
meeting for quite some time since the eGoM on SEZs imposed a freeze on
all clearances.

Only 63 SEZs have been notified so far while nearly 230 are waiting in
the wings after formal clearances. These projects will get final
clearance only after the BoA resumes processing of approvals.

While real estate companies keen to develop mega SEZs would find the
going tough due to the cap of 5,000 hectares on land acquisition,
smaller companies which applied for SEZ projects at a later stage would
stand to benefit due to lifting of the freeze on approvals.

"In respect of pending applications for SEZs, these may be processed for
in-principle, formal approval, notifications subject to the condition
that the state governments would not undertake any compulsory
acquisition of land for such SEZs," said a statement from the commerce &
industry ministry. Earlier, it was expected that the BoA would meet this
month but resumption of clearance would begin next month in view of
recent developments, officials said.

Developers first obtain provisional clearances and get formal clearance
only after completing land acquisition. Finally, SEZs are notified only
when all formalities are completed by developers. Following a decision
by the eGoM, the commerce department would now verify adherence to land
acquisition norms before providing the green signal for final clearance.

http://economictimes.indiatimes.com/News/Economy/Policy/BoA_may_resume_SEZ_clearances_next_month/articleshow/1863563.cms

Infy, Suzlon SEZs to get notified

2007-04-10T11:24:00.000-07:00

Infy, Suzlon SEZs to get notified

TIMES NEWS NETWORK[ FRIDAY, APRIL 06, 2007 03:43:16 AM]

NEW DELHI: With the empowered group of ministers (eGoM) headed by
external affairs minister Pranab Mukherjee lifting the freeze on SEZ
approvals, a number of projects, including Ascendas ITPL (Bangalore),
Brandix Textile City (Visakhapatnam) and Lotus Footwear
(Thiruvannamalai, TN), are expected to be put on the fast track.
Developers of these projects have been complaining about delays
following the freeze imposed by the eGoM and state governments and had
urged the Centre to clear these .

Among the 83 projects that would be notified following Thursday's
decision of the eGoM to lift the freeze include Ramky Pharma City SEZ
(Visakhapatnam), Kakinada SEZ (Kakinada), APIIC multi-product SEZ
(Visakhapatnam), Orient Craft Textiles SEZ (Gurgaon) and Infosys
Technology SEZs (Pune & Mysore). Notification in respect of the 83 cases
of formal approvals, documents for which have been submitted by the
developers, may be issued by the department of commerce soon.

However, the notifications would be issued only after due verification,
including issues concerning any dispute relating to land. The other
major projects awaiting notification include Wockhardt Pharma SEZ
(Aurangabad), Maharashtra Airport Development Corporation's
multi-product SEZ (Nagpur), Jindal Stainless Steel SEZ (Kalinga Nagar in
Orissa), Mahindra World City SEZ (Jaipur), SICOT Footwear SEZ
(Kancheepuram) and Suzlon Infrastructure at Coimbatore.

The governments of Tamil Nadu and Andhra Pradesh, in particular, have
been pushing for early lifting of the freeze on SEZ approvals. Some
other states, such as Orissa, which were not quick in getting project
clearances initially had argued that the freeze was not fair on them.

http://economictimes.indiatimes.com/News/Economy/Policy/Infy_Suzlon_SEZs_to_get_notified/articleshow/1863561.cms

Reliance likely to break up Jhajjar SEZ into 5 chunks

2007-04-10T11:23:00.003-07:00

MAYUR SHEKHAR JHA

TIMES NEWS NETWORK[ SATURDAY, APRIL 07, 2007 01:12:37 AM]

GURGAON: Trust Reliance Industries (RIL) to roll with the punches. It
has already started discussions with the Haryana government over
modifications to the plans for its giant SEZ at Jhajjar, originally
proposed to sprawl over 25,000 acres. The need for modification has been
necessitated by the revision of SEZ norms by the empowered group of
ministers (eGoM). RIL is considering breaking up the giant SEZ into five
separate zones: one large multi-product SEZ and four smaller ones.

According to sources in the Haryana government, RIL has proposed it will
go ahead with land acquisition in the area. However, further acquisition
will only be aimed at generating contiguity in the 10,000-odd acres the
company has acquired. Sources say contiguity in the project could be
ensured by the acquisition of nearly 5,000 acres more. Then, the company
may use 12,500 acres for one multi-product SEZ, and spin off its
proposed container facility, food processing unit, power plant and
airport into separate projects.

When contacted, an RIL spokesperson declined to comment. Haryana State
Infrastructure & Industrial Development Corporation (HSIIDC) officials,
however, confirmed that efforts to find an alternative have been
initiated by both the parties. "Something has to be done. We have made
headway and there is general excitement in the state, with expectations
of major economic activities and subsequent creation of employment
opportunities. We will definitely go ahead with the project, obviously
adhering to the proposed policy regulations," a Haryana government
spokesperson told ET.

It is, however, not clear if RIL will apply for SEZ status and
concomitant tax exemptions for the airport project. As of now, food
processing units, 1,000 mw-plus power plants and container facilities
catering to the agri sector enjoy tax breaks. RIL had plans for a
captive airport in the SEZ, which it could now move out, though it is
not clear if it could avail the tax benefits.

Uncertainty surrounded the project after the eGoM on Thursday imposed a
cap of 12,500 acres for a single applicant and said the states will not
be involved in land acquisition for SEZs. Moreover, only those projects
will get a go-ahead that have contiguous land. Although RIL has acquired
large tracts of land, it has not been able to strike contiguity as the
area includes several patches that are still owned by local land owners.

As per RIL's original MoU with the Haryana government, the company was
to buy 17,500 acres directly from farmers, and the state was to give the
remaining 7,500 acres. Further, the state was to release its
contribution only to help the company achieve contiguity, that too after
the company had completed its share of land acquisition

http://economictimes.indiatimes.com/News/Economy/Policy/Reliance_likely_to_break_up_Jhajjar_SEZ_into_5_chunks/articleshow/1868060.cms

Lankan co mulls $700 million in Nellore textile SEZ

2007-04-10T11:23:00.002-07:00

AMITI SEN

TIMES NEWS NETWORK[ SATURDAY, APRIL 07, 2007 01:46:21 AM]

NEW DELHI: The Sri Lanka-based premium inner-wear manufacturer MAS
Holdings has proposed investment of $700 million in a textile SEZ at
Nellore in Andhra Pradesh. The SEZ is to be spread over 7,000 acres. The
company has already purchased land directly from the owners and has
applied for a formal approval from the board of approval (BoA) for SEZs.

Speaking to ET, commerce & industry ministry officials said that the
proposal will be taken up by BoA next month and is likely to be cleared.
"Since the company has already purchased the required land, the recent
changes in the SEZ policy, restricting compulsory acquisition of land,
do not apply to this case," an official said.

MAS Holdings proposes to create 31,000 jobs within the SEZ and 40,000
jobs outside the SEZ. "It is expected that the company will be able to
complete all required formalities in the next few months and start
production in eighteen months," the official said.

With the empowered group of ministers (eGoM) on SEZs lifting the freeze
on fresh approvals in its meeting on Thursday, the BoA is now free to
examine all proposals. There are 162 proposals, which had been given
in-principle clearance, which will now be examined for formal approval.

About 15 proposals have got land and will not face any clearance
hurdles. There are about 350 cases in the pipeline yet to be examined by
the BoA. With the eGoM barring the government from acquiring land for
private developers, the land acquisition process in certain cases may
slow down.

However, officials say that if developers come out with a good offer,
are sensitive to the local needs and have an open and flexible approach,
problems can be resolved. "There are cases where developers have
consulted local people to identify the land which will cause least
disruption," the official said.

http://economictimes.indiatimes.com/News/Economy/Policy/Lankan_co_mulls_700_million_in_Nellore_textile_SEZ_/articleshow/1868089.cms

More land grief for SEZs

2007-04-10T11:23:00.001-07:00

KG NARENDRANATH & HEMA RAMAKRISHNAN

TIMES NEWS NETWORK[ SATURDAY, APRIL 07, 2007 03:05:35 AM]

NEW DELHI/PUNE: Scores of private developers in various stages of
implementing their plans to set up special economic zones (SEZs) on land
acquired by state governments will have to either purchase land afresh
or abandon their plans. All SEZ proposals for which states acquired or
allotted land after February 10, 2006, when the SEZ Act was notified,
will have to be redone, according to official sources.

This follows Thursday's decision of the empowered group of ministers
(eGoM) to bar forceful acquisition of land for SEZs, even if these have
been already given in-principle approval by the board of approval (BoA).
Many developers were hoping to piggyback on the governments' ability to
acquire land forcefully.

The eGoM decision is that the developer—government or private—will
purchase the land on its own from willing sellers. A senior commerce
ministry official told ET that the new policy will apply to all 162
cases for which in-principle approval has been given, in addition to new
proposals. He added that the 234 SEZs that have received formal
approvals would not have a problem in receiving the final notification
as "the land was bought or acquired prior to the notification of the Act".

However, this assumption may be different from ground realities.
According to sources, in at least two dozen formally-approved
SEZs—including Reliance's proposed multi-product SEZ near Garhi Harsaru
in Gurgaon district—land acquisition took place after the SEZ Act was
notified.

http://economictimes.indiatimes.com/News/Economy/Policy/More_land_grief_for_SEZs/articleshow/1868140.cms

Madhya Pradesh Minister backs SEZ

2007-04-10T11:17:00.001-07:00

Tuesday April 10 2007 08:24 IST
MADURAI: Madhya Pradesh Minister for Commercial Tax Babulal Gaur has
said that Special Economic Zones (SEZs) will be beneficial for the state
as it will create employment opportunities for villagers.

Addressing a press conference here on Monday, Babulal, who had come to
study the functioning of industries in Tamil Nadu, said that the four
Special Economic Zones that were established in Madhya Pradesh had been
beneficial to the local villagers.

The facilities had generated as many as 6,000 jobs in the last two years
while 40,000 jobs were expected to be created this year, he added.

More NRIs are expected to invest, he said and added that the expected Rs
2 lakh crore investment would generate three lakh jobs by 2008.

http://www.newindpress.com/NewsItems.asp?ID=IET20070409220301&Title=Southern+News+%2D+Tamil+Nadu&rLink=0

MAS Holdings to invest $700 m in textile SEZ

2007-04-09T00:15:00.000-07:00

ARUN S
DATELINE

NEW DELHI, APR 6 : Sri Lanka-based MAS Holdings would invest $700
million to set up a textile SEZ in the remote Chintavaram village in
Andhra Pradesh.
Sources said the company has already procured 700 acres in the area and
would be applying for the Board of Approval's nod soon. MAS Holdings has
also assured that in the next 18 months they would provide direct
employment to 31,000 people.

Pointing out that India currently uses only 21 out of the 101 tariff
lines in global textile trade, government sources said the entry of
foreign companies like MAS Holdings and Brandix in the apparel segment
is being encouraged to help India get into trading in the other 80
tariff lines.

"The spin-off effect from these textile multinationals setting up shop
here is that more Indians will learn to compete internationally. Many of
them would become entrepreneurs and enter into trading in the 80 tariff
lines where India does not have any presence," an official said.

Another Sri Lankan firm Brandix on Thursday got the clearance from the
empowered Group of Ministers for notification of their 404-hectare
apparel SEZ in Vishakhapatnam.

Brandix has already pumped in $100 million and employed 1,000 people.

However, DK Nair, secretary-general of the Confederation of Indian
Textile Industries, said the government should also help domestic
industries by eliminating or drastically cutting the import duty and
excise duty on man-made fibres and also by putting in place flexible
labour laws besides increasing the availability of power and reducing
its cost.

http://www.financialexpress.com/fe_archive_full_story.php?content_id=160344

SEZs unfrozen, but cut to size

2007-04-09T00:10:00.001-07:00

SEZs unfrozen, but cut to size

ECONOMY BUREAU
DATELINE

NEW DELHI, APR 5: The empowered group of ministers (eGoM) on Thursday
paved the way for the notification of 83 special economic zones (SEZs)
that were in limbo for the past 75 days mainly due to controversies over
land acquisitions. It also lifted the ban on fresh proposals for setting
up SEZs.
Government sources said the commerce & industry ministry could
immediately clear 54 SEZs and another 29 soon after. Significantly, the
Centre has asked states not to transfer land compulsorily acquired for
SEZs to private entities.

The eGoM also capped the maximum area for an SEZ at 5,000 hectares,
which states could reduce further if they wish. While no proposal over
5,000 hectares has been cleared so far, the limit will require Reliance
Industries (with plans to set up two 10,000-hectare SEZs in Jhajjar,
Haryana and in Mahamumbai), DLF (8,000 hectare in Gurgaon), Omaxe (6,070
hectare in Alwar) and Mahindras to cut their SEZs to size.

The other major decisions include fixing a uniform limit of 50% on
minimum processing area for all SEZs. Multi-product SEZs were hitherto
required to have a processing area of only 35%. This move will prevent
SEZs from being used purely as commercial real estate.

Big Thaw
• Commerce ministry could now clear 54 SEZs and another 29 later
• States asked not to transfer land acquired for SEZs to private entities
• SEZ area capped at 5,000 ha, which states could reduce further

Since states will now be restricted from transferring land to private
SEZ developers, the onus will be entirely on companies to procure land.
They will have to negotiate with farmers or landowners directly.

SEZ proposals where state agencies had acquired or proposed to acquire
land would not be cleared by the Centre unless a compensation package as
suggested by the national rehabilitation policy was awarded to displaced
farmers, the sources said. Proposals where states have joint ventures
with private entities would not be cleared, either.

http://www.financialexpress.com/fe_archive_full_story.php?content_id=160297

Land acquisition main hurdle for SEZ: CM

2007-04-09T00:06:00.003-07:00

ECONOMY BUREAU
DATELINE

MUMBAI, APR 3 : Maharashtra chief minister, Vilasrao Deshmukh, asserted
that land acquisition remained as the main hurdle in the establishment
of special economic zones (SEZ) in the state.
He termed the Nandigram incident as 'unfortunate' and said that farmers'
interests were to be protected by offering packages to farmers whose
land was to be acquired.

Deshmukh had already announced that the state government would not
acquire fertile land, but would acquire semi-fertile or arid land for SEZs.

He added that industries, particularly the IT sector, had potential to
solve the problem of unemployment. The state government would play a
role of facilitator. "We want to see the creation of more and more jobs,
so that the problem of unemployment is solved," he said. Hinjewadi in
Pune, which is being developed as a special economic zone by the MIDC,
has become a world class IT centre. Private IT parks are being promoted
in a big way in Maharashtra. The government has approved the setting-up
of 146 IT parks all over the state, Deshmukh said. He added that Nagpur
was being developed as Asia's Frankfurt.

Maharashtra's strength lay in the number of educational institutions, he
added. "The IT industry focuses only on turnover. It should touch the
lives of the people at the grassroot level and be a tool to remove the
curse of poverty," Deshmukh said.

http://www.financialexpress.com/fe_archive_full_story.php?content_id=160017

SEZs to receive Rs 100k cr, says govt

2007-04-09T00:06:00.001-07:00

ECONOMY BUREAU
DATELINE

NEW DELHI, APR 3: Special economic zones (SEZs) would bring in
investments worth Rs100,000 crore, including foreign direct investments
(FDI) of over Rs 25,000 crore by December, and provide direct employment
to 5 lakh people, the commerce ministry said in its annual report.
In the 63 SEZs notified so far, Rs.13,435 crore has already been
invested in less than one year and 18,457 have already received direct
employment, the ministry said.

The growth rate of merchandise exports at over 20% during the last 4
years is more than twice the current GDP growth, it said. The rising
competitiveness of sectors like engineering goods (auto parts) and high
commodity prices (petroleum and metals) have been the driving force for
high growth of exports, the ministry added.

Referring to the setting up of a Special Purpose Tea Fund (SPTF) under
the Tea Board, the ministry said the proposal is to cover an area of 2.1
lakh hectares for rejuvenation and replantation activities in 15 years.
On multilateral trade negotiations, the ministry said India has pursued
its interests across all areas under the Doha Work Programme. It
continued to work constructively with its partners, particularly the
G-20 and the G-33 in agriculture, to secure its development imperatives.

http://www.financialexpress.com/fe_archive_full_story.php?content_id=160006

SEZ loans may cost less

2007-04-09T00:05:00.001-07:00

PM asks for review of Reserve Bank's classification

ARUN S
DATELINE

NEW DELHI, APR 3: The Prime Minister has asked the empowered group of
ministers (eGoM) on special economic zones (SEZs) to decide if these
areas should be given infrastructure status, as opposed to the RBI
classification that treats them akin to commercial real estate.
Infrastructure status would make loans to SEZs cheaper.
According to government sources, the eGoM meeting, originally planned
for the second week of April, will now be held on April 5 following
pressure from investors. Other important issues on the agenda include
capping the maximum area of an SEZ at 10,000 hectares and raising the
processing area to 50% for all SEZs.

At present, there is no limit on the size of an SEZ. Further, the
minimum processing area for a multi-product SEZ is fixed at 35%, while
for multi-services and sector-specific SEZs, it is 50%.

The government has circulated the agenda note to SEZ developers and
other stakeholders for the April 5 eGoM meeting, the sources said. The
group would also take a final call on whether 84 SEZs free of legal
issues related to land acquisition be notified.

The RBI had last September increased the risk weightage on bank lending
to SEZs to 150%, and more than doubled the general provisioning
requirement to standard advances from 0.4% to 1%. Investors have
strenuously complained to the government that the move had increased
costs substantially.

The commerce ministry had opposed the RBI move, arguing that SEZs would
attract huge FDI, create more employment and help develop world-class
infrastructure.

http://www.financialexpress.com/fe_archive_full_story.php?content_id=160055

Land issues bog down Maharashtra SEZs’

2007-04-09T00:04:00.000-07:00

ECONOMY BUREAU
DATELINE

MUMBAI, APR 3: The Maharashtra chief minister Vilasrao Deshmukh has
asserted that land acquisition has been the main problem in the
establishment of special economic zones (SEZ) in Maharashtra. He termed
the Nandigram incident as unfortunate and said that farmers interests
need to be protected by offering a package especially for those farmers
whose land is to be acquired.
Deshmukh had already announced that the state government would not
acquire fertile land but the acquisition of semi-fertile or arid land
would be done for the purpose of setting up of SEZs.

He said new industries particularly the IT sector has potential to solve
problem of unemployment. The state government would play a role of
facilitator. "We want to see creation of more and more jobs so that the
problem of unemployment is solved,"he said.

Hinjewadi in Pune, which is being developed as a Special Economic Zone
by the MIDC, has become a world class IT Centre. Private IT parks are
being promoted in a big way in Maharashtra. The government has approved
setting-up of 146 IT parks all over Maharashtra, Deshmukh said, adding
that Nagpur was being developed as Asia's Frankfurt.

Maharashtra's strength lies in the number of educational institutions it
has. Even in any remote corner of the state, one can find either a
medical or an engineering college, the Chief Minister said. "The current
focus of the IT industry is only on turnover. IT should touch the lives
of the people at the grassroots levels. It should be made into a tool to
remove the curse of poverty,"Deshmukh said.

http://www.financialexpress.com/fe_archive_full_story.php?content_id=159995

Thaw in SEZ freeze likely

2007-04-08T23:46:00.001-07:00

171 developers with land free of legal problems could benefit from the move

ARUN S
DATELINE

NEW DELHI, MAR 2: The government is likely to allow developers of
Special Economic Zones (SEZ) with land free of controversy and legal
wrangles to go ahead with the development of their projects. The move is
significant, as it would give relief to171 SEZs, which were not notified
by the government despite receiving formal clearances from the Board of
Approval.
The government decided to put the notification of SEZs on hold after
Prime Minister Manmohan Singh called for the formulation a national
rehabilitation policy before any fresh approvals were issued. So far, 63
SEZs have been notified, which have already brought in over Rs 13,500
crore in investment and created 18,000 jobs.

Officials told FE that defreezing of the notification on SEZs could take
place as early as next week. This would not violate the mandate of the
Empowered Group of Ministers, which is looking into various issues
relating to SEZs, including that of rehabilitation of those displaced by
such projects. Sources said the since the developers of these projects
already had clear title deeds for their land, the government could
consider issuing the notifications soon.

The issue of issuing notifications to SEZs with clear land titles is
likely to figure prominently in the Board of Trade meeting under the
chairmanship of Kumar Mangalam Birla, scheduled for Wednesday.

Land Locked
• Issue of notifying SEZs with land to figure in Board of Trade meeting
on Wednesday
• 63 notified SEZs have brought investments worth Rs 13,500 crore and
hired 18,000 people
• Haryana, Gujarat, Karnataka,
TN and Andhra asked the govt to lift moratorium on SEZs

Chief ministers of Haryana, Gujarat, Karnataka, Tamil Nadu and Andhra
Pradesh have been lobbying vigorously for the freeze on SEZs to be
lifted. Many of these chief ministers have even shot off letters to
members of the Empowered Group of Ministers seeking a lifting of the ban.

In addition, various domestic and foreign investors have also been
pressing the Centre to relax the moratorium on SEZs. While the Export
Promotion Council for EOUs & SEZs has appealed to the government to
remove the existing uncertainty, companies including Taiwanese footwear
group Feng Tay Enterprises and Sri Lankan textile company Brandix have
written to the commerce ministry as well.

http://www.financialexpress.com/fe_archive_full_story.php?content_id=156619

Salim Group ready for shifting to alternative site for SEZ

2007-04-08T22:56:00.000-07:00

Our Bureau

Proposed chemical hub may come up at Haldia

--------------------------------------------------------------------------------
Project details
Dr Sen said the State Government would have to zero in on an alternative
site for the proposed SEZ before conveying the decision in this regard
to the Salim Group.
He said the Salim Group was keen to begin work on various infrastructure
projects that had been proposed.
--------------------------------------------------------------------------------

Kolkata April 4 The Salim Group of Indonesia, which has proposed to
implement several projects in West Bengal, has agreed to shift the site
of a Special Economic Zone (SEZ) project that was earlier proposed to be
set up in Nandigram.

This was stated here today by Dr Sabyasachi Sen, West Bengal's
Industries Secretary, after a meeting with Mr Prasoon Mukherjee,
spokesperson of New Kolkata International Development, a special purpose
vehicle that has been formed to implement the Salim Group's projects in
West Bengal.

Mr Mukherjee discussed the progress of the various projects with the
Chief Minister, Mr Buddhadeb Bhattacherjee.

Following violent protests against land acquisition in Nandigram, the
West Bengal Government had announced a few days ago that the proposed
SEZ project would be shifted to a different site if the local people did
not want it to be set up at Nandigram. Nearby Haldia is being talked of
as a possible relocation site for the proposed SEZ/chemical hub.

Alternative site

Speaking to newspersons after his meeting with Mr Mukherjee, Dr Sen said
the State Government would have to zero in on an alternative site for
the proposed SEZ before conveying the decision in this regard to the
Salim Group. He said the Salim Group was keen to begin work on various
infrastructure projects that had been proposed. Work on these would
start as soon as possession of land was handed over to them.

Dr Sen said the agreement for the proposed SEZ with the Salim Group
envisages its implementation over a 15-year period from the date of
signing of the agreement. The agreement does not mention that the entire
land required would have to be handed over to the Salim Group at one go.
As such, handing over the required land in a staggered manner could not
be ruled out.

According to him, the State Government would ideally like to acquire
land for industrial purposes and ensure that private investors are
permitted use of the land as "lessees". However, the State Government
was open to the idea direct purchase of land by industry. "That is also
a valid option," he said.

http://www.thehindubusinessline.com/2007/04/05/stories/2007040501491100.htm

CPI(M) wants ceiling on SEZs to be reviewed

2007-04-08T22:43:00.001-07:00

Our Bureau

`The SEZ policy announced is totally inadequate'

--------------------------------------------------------------------------------
The CPI (M) did not agree with State Governments not being involved in
acquisition of land, particularly for those of a larger size.
--------------------------------------------------------------------------------

New Delhi April 6 The Communist Party of India (Marxist) said on Friday
that the Government should await the recommendations of the Standing
Committee on Commerce and re-examine the whole matter on special
economic zones (SEZs).

The Polit Bureau of the CPI (M) said that a multi-product SEZ should
have a minimum specified size of only 400 hectares (1,000 acres) and a
ceiling of 2,000 hectares (5,000 acres).

Pegs ceiling

The Empowered Group of Ministers (EGoM) on SEZs had on Friday decided to
peg the ceiling on multi-product SEZs at 5,000 hectares (12,500 acres).

It, however, did not disturb the existing minimum size of 1,000 hectares
(2,500 acres) for multi-product SEZs.

Stating that the changes in SEZ policy announced by the EGoM was totally
inadequate and fell far short of what was required, the CPI (M) Polit
Bureau noted that it has ignored the comprehensive suggestions made by
the Left parties.

"The UPA Government should realise that the political parties across the
board have come out against the present SEZ Act and rules. If the
Government proceeds with the SEZs in the present form, the matter will
have to be taken up in Parliament so that the demand for amendments to
SEZ Acts and rules can be dealt with there," a statement issued by CPI
(M) Polit Bureau said.

Iniquitous Tax

The CPI (M) did not agree with State Governments not being involved in
acquisition of land, particularly for those of a larger size.

"There has to be State intervention to ensure that if any land is being
bought, the farmers and others working on land get a fair price. In the
absence of any changes in the Land Acquisition Act and a rehabilitation
policy that can be legally enforceable, the licence being given to
corporates to buy land on a large scale will be harmful," the statement
added.

The CPI (M) said that the EGoM has left the "exorbitant and unjustified"
tax concessions intact.

http://www.thehindubusinessline.com/2007/04/07/stories/2007040704591000.htm

Nuziveedu Seeds will promote Rs 1,500 cr SEZ near Chennai

2007-04-08T22:42:00.000-07:00

Our Bureau

Tidco joins in implementing the project

--------------------------------------------------------------------------------
The SEZ will be an environment friendly structure with water recycling, green power from windmills and an energy efficient building
--------------------------------------------------------------------------------

Chennai April 6 Nuziveedu Seeds Ltd, a Secunderabad-based company, is to promote a Rs 1,500-crore special economic zone for IT, ITES and biotechnology companies near Chennai.

According to an official press release, Nuziveedu Seeds entered into an agreement with the Tamil Nadu Government to promote the project.

The agreement was signed in the presence of the Chief Minister, Mr M. Karunanidhi, here on Friday, between Mr M. Prabhakar Rao, Managing Director of Nuziveedu Seeds and Mr S. Ramasundaram, Chairman and Managing Director of Tamil Nadu Industrial Development Project.

A special purpose vehicle, Zillion Estates Ltd, promoted by Nuziveedu Seeds as the main promoter, and Tidco will implement the project. Tidco will also facilitate the clearances for the project.

Mr Rao told presspersons that the SEZ — Chennai Cyber City — would come up at Sholinganallur, on the IT Corridor. The company has acquired 66 acres of land, where it will construct the 46-lakh sq ft IT park, along with a residence area of 21-lakh sq ft and a hotel, and retail space of about 4-lakh sq ft.

The SEZ will be an environment friendly structure with water recycling, green power from windmills and an energy efficient building, he said.

International consultants Ernst & Young did the feasibility for the project. Assetz Property Services Pvt Ltd is to assist the promoters in planning through construction and marketing. The US-based HOK Planning Group are the designers for the project.

Nuziveedu Seeds has diversified interests, including in textiles, in which it has invested over Rs 1,000 crore, sugar and cogeneration, and IT parks development. It has a six-lakh sq ft IT park in Bangalore, and is setting up two SEZs in Hyderabad and one in Delhi.

http://www.thehindubusinessline.com/2007/04/07/stories/2007040701031300.htm

--
Sudarshan Rodriguez

Sudarshan Rodriguez,

Marine Conservation Analyst

Project Coordinator,

Post- Tsunami Environment Initiative

(www.ptei-india.org)

Flat 2B, Adithya Apartments,

38 Balakrishna Road,

Valmiki Nagar, Thiruvanmiyur,

Chennai-600 041

Tamil Nadu, India.

Phone:+91 44 420 19470

Mobile: +91 9840680127

Fax: +91 44 420 19468

Email: sudarshanr@yahoo.com

You are not what you do , you do what you are

One's profession and career should be their hobby, passion and cause

Govt lifts freeze on SEZs, caps size at 5,000 hectares

2007-04-08T22:40:00.002-07:00

Our Bureau

Processing area increased to 50 per cent for all zones; 83 more SEZs
notified

--------------------------------------------------------------------------------
New norms
States free to fix lower ceiling on SEZ size
Govt plans comprehensive Land Acquisition Act
88 applications yet to be approved
--------------------------------------------------------------------------------

Mr Kamal Nath

New Delhi April 5 The Government today lifted the freeze on special
economic zones (SEZs) while simultaneously tightening rules by
prescribing a ceiling on the size at 5,000 hectares for multi-product
SEZs and increasing the processing area from 35 per cent to 50 per cent
for both multi-product and sector-specific zones.

The Empowered Group of Ministers on SEZs, headed by the Union External
Affairs Minister, Mr Pranab Mukherjee, met today to arrive at the decision.

After a lull of two-and-a-half months, since the last meeting of the
Group froze SEZ approvals on January 22, today's decision has come as a
clear signal to developers and units in these zones that they could go
ahead with their business plans.

Fixing of the upper ceiling of 5,000 hectares and raising the processing
area uniformly would also allay any apprehensions about possible misuse
of land for purposes other than the prime one of setting up
manufacturing activities, generating exports and creating dedicated
infrastructure amenities within these enclaves.

With the SEZ issue turning into a political hot potato, the Government
has also given States the freedom to fix a lower ceiling on the size of
the SEZ.

It has also been said that there would not be any compulsory acquisition
of land for SEZs.

The Commerce and Industry Minister, Mr Kamal Nath, told newspersons that
the meeting also gave nod to notification for 83 applications that were
formally approved.

This takes the total number of notified SEZs from 63 to 146.

This leaves 88 cases to be notified out of 234 approved by the Board of
Approvals so far.

The Minister clarified that the decisions taken today would be
applicable to all SEZs, "including those which have already been notified."

On pending applications for SEZs, he said that they may be processed for
in-principle, formal approval and notifications subject to the proviso
that the State Governments will not undertake any compulsory acquisition
of land for such SEZs.

He also said that the Ministry of Rural Development would formulate a
comprehensive Land Acquisition Act.

A broader resettlement and rehabilitation policy would be worked out to
ensure livelihood from the project to at least one person from each
displaced family, he added.

Later, the Commerce Secretary, Mr G.K. Pillai, told newspersons that out
of the 83 applications of formal approvals that would be notified now,
54 have been cleared by the Law Ministry; the others are in the process
of getting notified.

The major SEZs whose notifications are pending include Brandix Textiles
City at Visakhapatnam, Kakinada SEZ at Kakinada, Infosys SEZ at Pune,
Ascendas's ITPL SEZ at Bangalore, Jindal Stainless Steel SEZ at Kalinga
Nagar (Orissa), Lotus Footwear SEZ at Cheyyar, Suzlon Infrastructure SEZ
at Coimbatore and Wockhardt Pharma SEZ at Aurangabad.

Officials said that once all the 234 formally approved SEZs become
operational, investment would be of the order of Rs 3 lakh crore and
four million jobs would be generated.

They also said that exports projected by all notified SEZs numbering 82
so far (19 old plus 63 new) in 2007-08 would be Rs 67,300 crore.

http://www.thehindubusinessline.com/2007/04/06/stories/2007040607020100.htm

`No' to SEZ

2007-04-08T22:40:00.001-07:00

Paul Noronha

ANOTHER HURDLE: Farmers and tribals protesting in Mumbai on Thursday
against land acquisition by the Maharashtra Government for Special
Economic Zones in Raigad district, which will be spread over 10,000
hectares, involving a cost of Rs 30,000 crore.
http://www.thehindubusinessline.com/2007/04/06/stories/2007040601232100.htm

SEZs require integration with social infrastructure: Marg Constructions

2007-04-08T22:39:00.000-07:00

Vidya Bala

Company plans 2 special economic zones near Chennai

--------------------------------------------------------------------------------
The company has set up wholly owned subsidiaries for each of its
business verticals which includes integrated commercial development,
satellite city and serviced apartments.
--------------------------------------------------------------------------------

Chennai April 5 Special economic zone (SEZ) is all about creating a
sustainable city; being a real estate player does not automatically
qualify one to build SEZs, says Mr G.R.K. Reddy, Chairman and Managing
Director, Marg Constructions Ltd.

The Chennai-based company, listed on the BSE, has plans to develop two
special economic zones near Chennai, one a combination of light
engineering and auto ancillaries and the other multiservices.

Mr Reddy told Business Line that SEZs required an understanding of the
area's social profile including mindset of the locals and their skill
sets. This knowledge is essential to understand which industry/sector
would suit that economic zone. "It is not about merely activating a
large economic zone but about integrating it with the social
infrastructure," he said. He also added that economic zones must be
identified and built amidst a cluster of villages and not in the
peripherals of cities. Such a cluster would eventually develop into a
city thus bridging the rural-urban divide.

On the SEZ controversy, he said that there may have been a disconnect
somewhere in the process and hopes that it would disappear once left to
market realities. "The Government has taken an initiative to buy the
land and give it to developers. If that process does not work, I think
the entrepreneurs are capable of procuring land."

The company itself acquired over 600 acres of land for Marg's SEZs.

He was confident that no landlord would want to retain land that does
not fetch any income.

Land banks

On the issue of real estate players sitting on huge land banks, he said
that land banks derived true value only from the projects they carry. Mr
Reddy claims that all the land that the company owns was bought after
zeroing in on projects.

"Every land purchased should have a project earmarked. Buying land
without a planned project is like building a bridge and then looking for
water," he said.

Operating through SPVs

Marg Constructions also has malls and township development under its
portfolio. All the projects are located on the Old Mahabalipuram Road.

The company has set up wholly owned subsidiaries for each of its
business verticals which includes integrated commercial development,
satellite city and serviced apartments. Mr Reddy said that such SPVs
would provide flexibility and accountability in terms of financing and
also enable entry of strategic investors or divest stake when real
estate investment trust or funds are launched.

http://www.thehindubusinessline.com/2007/04/06/stories/2007040603460300.htm

Industry chambers welcome GoM decision on SEZs

2007-04-05T11:18:00.001-07:00

PTI[ THURSDAY, APRIL 05, 2007 06:58:03 PM]

NEW DELHI: Industry chambers today welcomed the Centre's decision to
lift the freeze on special economic zones, saying it clears the
uncertainty surrounding the SEZ policy.
"The decision will clear uncertainties and give a clear signal that SEZs
are here to stay," FICCI said in a statement.
The clearance of the proposals to set up SEZs with a limit on
multi-product zones and the discretion to the states to lower the size
below this limit would give flexibility in establishing such zones, it
said.
Echoing similar sentiments, CII said the decision would put an end to
compulsory land acquisition by state governments and limiting the size
of SEZs would end the ambiguity about the future of SEZs.
"The state industrial development corporations may now use land already
earmarked for industrial purposes for creation of these SEZs," a CII
statement said.
The decision to fix a ceiling of 5,000 hectares of land for SEZ was a
praiseworthy step that would settle all the controversies on SEZs,
Assocham said.
"Clearing of 83 proposals will accelerate economic activities for
increased production and exports," Assocham President Venugopal N Dhoot
said.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Industry_chambers_welcome_GoM_decision_on_SEZs/articleshow/1862475.cms

SEZs cleared: Feed the globe with Indian goods

2007-04-05T11:17:00.002-07:00

K A BADARINATH

INDIATIMES NEWS NETWORK[ THURSDAY, APRIL 05, 2007 05:30:15 PM]

NEW DELHI: At last there is some movement on the contentious special
economic zones (SEZs). But, all outstanding issues have been swept
beneath the carpet while de-freezing the 83 zones.

Promoters of these zones where land acquisition has been completed may
go ahead with setting up the SEZs. These zones are billed as the major
economic expansion show pieces of UPA Government to feed the
international markets with both goods and services from India.

But, several questions remain unanswered. Lifting the ban on SEZs should
have been done in sync with finalization of rehabilitation policy for
farmers and rural families impacted due to land acquisition.

Empowered Group of Ministers (EGoM) headed by External Affairs Minister
Pranab Mukherjee has made a meek attempt towards fine-tuning the SEZ
policy especially after bloody pitched battles that were fought in the
hinterlands of West Bengal and Orissa.

For instance, the ceiling for land area has been fixed at 5000 hectares.
This means larger zones proposed by companies like Reliance Industries
Ltd may have to be clipped. It has also been made mandatory that 50
percent of the area under SEZs must be utilized as 'processing area'. In
effect, stringent land utilization norms have been stipulated to negate
the charge that most of these zones have become major real estate
ventures while actually putting minimum land to create additional
industrial capacities for multiple products.

State Governments role in land acquisition has been minimized.
Especially with the Left allies in West Bengal getting the flak for
Nandigram massacre, the UPA Government seems to have made life easier
for the state satraps. But, it may not be a wise move to leave the
farmers to negotiate with the corporates and export community on the
land price.

An institutional mechanism may have to be put in place to ensure that
farmers are paid adequate price on the land sold to developers of SEZs.
One model that has quietly worked well and worth considering was in
Gujarat where instead of ownership only land lease was transferred to SEZs.

UPA Government is yet to take on board the various models for
rehabilitating the farmers and providing them with adequate
compensation. Proposals range from making farmers cooperatives and
associations' equity partners in the SEZs (in lieu of the land) to
providing jobs and reserving ancillary units for the rural families.
They are yet to pass muster of the powers that be.

Noted agriculture economist Dr M.S.Swaminathan's idea of setting up
Special Agri-economic Zones (SAZs) to boost farm based industry and
related infrastructure to boost its contribution to GDP and exports
revenue.

Finance Minister Palaniappan Chidambaram's concerns on revenue angle may
also have to be taken on board by the UPA Government.

Nevertheless, it is movement forward.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/SEZs_cleared_Indian_goods_all_over/articleshow/1862221.cms

SEZs freeze lifted, but cut to size

2007-04-05T11:17:00.001-07:00

PTI[ THURSDAY, APRIL 05, 2007 03:50:05 PM]

New Delhi : Yielding to backlash from various quarters, the Centre on
Thursday decided to put an end to compulsory land acquisition by the
state governments for Special Economic Zones and limited the size of
SEZs to 5,000 hectare.

The Empowered Group of Ministers (EGOM) of SEZ, which met here, also
cleared 83 SEZs with no dispute and increased the processing area of the
SEZs to 50 per cent of the land size.

"The decision will be applicable to all SEZs including those which have
already been notified," Commerce and Industry Minister Kamal Nath told
reporters after the meeting.

The move follows opposition to the SEZ policy from various political
parties including the Left and the massive protests by farmers against
acquisition of farm land.

According to the decisions taken on Thursday, compulsory acquisition of
land for SEZs by the states under the Land Acquisition Act would not be
allowed, leaving it to the developers to directly purchase land from
farmers.

Further, the states would be empowered to reduce the size of SEZs below
the 5,000 hectare limit set by the Centre.

Nath said under the new Relief and Rehabilitation Policy, which would be
finalised soon, at least one member of the displaced family would have
to be employed in the project. This would be in addition to the
compensation paid to farmers.

With the freeze lifted, the government would approve all pending
applications where there is no land dispute.

Of the 234 SEZs with formal approvals, 63 have already been notified,
while 83 more were today cleared for notification. The Board of
Approvals will now take up 162 SEZs with in-principle approval and 140
pending applications.

The decision on limiting the size would hurt plans of companies such as
Reliance Industries which is setting up mega SEZs like Maha Mumbai and
one near Gurgaon.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Freeze_on_83_SEZs_lifted_50_land_for_processing/articleshow/1862052.cms

eGoM may clear 60 SEZ proposals at today’s meet

2007-04-05T11:16:00.003-07:00

TIMES NEWS NETWORK[ THURSDAY, APRIL 05, 2007 03:20:20 AM]

NEW DELHI: The empowered group of ministers (eGoM) on SEZs will meet on
Thursday to put an end to the uncertainty surrounding the fate of the
SEZ policy. The eGoM, headed by foreign minister Pranab Mukherjee, is
likely to give a go-ahead to about 60 proposals cleared by the law
ministry that are waiting for notification. It is also expected to put a
ceiling on the size of SEZs and place sectoral caps.

In its last meeting on January 22, the eGoM had put a freeze on fresh
approvals and notification of SEZs. While the move followed violent
protests in different parts of the country over forcible land
acquisition by states, even proposals which had land and had been
formally approved by the board of approval for SEZs were put on hold.

The eGoM is expected to lift the freeze on about 60 SEZ proposals which
have been cleared by the law ministry. Twenty more proposals, which have
cleared all formalities after obtaining land including getting a map, a
no-encumbrance certificate from states and an all-clear certificate from
the development commissioners, might also be given the green light,
sources said.Sources said a decision on lifting the freeze on fresh
approvals will be taken after the new rehabilitation package is put in
place.

In order to prevent situations like the Nandigram flare-up, the eGoM may
fix a ceiling between 1,000 and 1,500 hectares on all SEZs. The minimum
prescribed area of 1,000 hectares for multi-product SEZs may be brought
down to 400 hectares. The move, if implemented, will affect a number of
planned projects including Posco's steel SEZ in Orissa and Reliance
Group's Maha-Mumbai SEZ in Maharashtra.

The eGoM will also consider placing sectoral caps on SEZs. Sources said
a cap was likely to be placed on IT SEZs mushrooming all over the
country. A decision on whether the processing area of SEZs is to be
increased will also be taken by the eGoM.

According to officials, the eGoM may also decide to do away with all
in-principle clearances and rule that only developers with land should
apply for a formal approval for building SEZs.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/eGoM_may_clear_60_SEZ_proposals_at_todays_meet_/articleshow/1858871.cms

Nath hardsells relief for suppliers to SEZ

2007-04-05T11:16:00.001-07:00

G GANAPATHY SUBRAMANIAM & DEEPSHIKHA SIKARWAR

TIMES NEWS NETWORK[ THURSDAY, APRIL 05, 2007 02:49:16 AM]

NEW DELHI: Services supplied to special economic zones outside the zone
may be exempted from service tax. Making a strong pitch for the move,
the commerce ministry has asked the revenue department to provide the
exemption. A decision on the proposal is expected at a meeting on April 16.

The commerce ministry feels services supplied to a SEZ developer or unit
to carry out authorised operations in a special economic zone were
tax-exempt and the provision does not state that the operations had to
be carried out within the SEZ.

It has now taken up the issue with the revenue department as its service
tax wing was limiting the exemption. Service tax officials were limiting
the waiver as an earlier circular had provided service tax exemption for
consumption of a service within the zone.

Since the provisions of the SEZ Act do not specify if the service has to
be consumed within a SEZ, the revenue department cannot impose tax on
services consumed outside the zone for carrying out the business of the
zone, a commerce ministry official told ET.
Ministry officials will now hold a meeting with their counterparts in
the revenue department to resolve the issue.

The SEZ Act became operational from February 10, 2006. Section 26 of the
Act gives details of the exemptions and concessions available to SEZ
developers and entrepreneurs.

SEZ developers & units and the export promotion council for
export-oriented units and SEZs has taken up the matter on many occasions
with officials from both the departments. But with tax officials raising
demands on them, it had created an air of uncertainty.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Nath_hardsells_relief_for_suppliers_to_SEZ/articleshow/1858824.cms

Study blames patwaris for SEZ woes

2007-04-05T11:15:00.002-07:00

MAYUR SHEKHAR JHA

TIMES NEWS NETWORK[ TUESDAY, APRIL 03, 2007 02:45:31 AM]

GURGAON: The carelessness of government patwaris while conducting land
record surveys has emerged as one of the crucial reasons leading to
controversial acquisition of land in areas notified for SEZ and
industrial projects.

Utkarsh, an NGO working actively with the displaced in West Bengal,
claims that in the case of Nandigram, the state was not even aware of
the existence of residential units in the notified area. The NGO's
spokesperson Sanjoy Bandopadhyay told ET, "Perhaps, the government did
not have an updated record of construction in that area. The villagers
were also at fault because they did not register their construction
activities with the authorities which is illegal. However, the
authorities should conduct a thorough survey in an area, before
notifying it for such large scale industrial projects. We have taken up
this matter with state as well as opposition parties and human rights
activists."

Nearer to Delhi, a similar case has been brought to light in Manesar.
HSIDC has imposed Sec 4 (intention to acquire) in an area near IMT
Manesar, which it claims is vacant. However, this has been contested by
the local organisation — Kamal Farm Owners' Association.

" It appears that no one has actually surveyed the area and the master
plan has been drawn based on inaccurate facts such as patwari's old
records. Many families have inhabited this area in the last 10-odd
years, and we have apprised the concerned authorities of the ground
situation," the association's president PK Saxena said.

Infact, there are many loopholes when patwaris update regulators such as
district revenue officer and town & country planner with development
records at the grass-roots. In the process such patwaris become centres
of power which leads to easy corruption. "For a common man in rural
areas, it's absolutely impossible to get construction activities entered
into government records, without paying a hefty sum of money to these
patwaris," Mr Saxena said.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Study_blames_patwaris_for_SEZ_woes/articleshow/1848115.cms

SEZ for renewable energy devices to be set up in TN

2007-04-05T11:15:00.001-07:00

PTI[ MONDAY, APRIL 02, 2007 05:15:09 PM]

CHENNAI: A Special Economic Zone for manufacture of renewable energy
devices would be set up on 675 acres of land in Tamil Nadu, State
Electricity Minister N Veerasamy on Monday said.

Submitting the policy note of his department in the assembly, the
Minister said private promoters from Europe and America and renowned
Universities of the UK and US had shown interest in setting up
manufacturing facilities related to renewable energy and a world class
technology park within the proposed SEZ.

He said the Tamil Nadu Electricity Board had planned to augment its
generating capacity by 11,768 MW and to correspondingly expand the
transmission and distribution system during the 11th plan period. Under
Central sector, the first unit of Kudangulam atomic power project with a
capacity of 1,000 MW would be commissioned during 2007-2008 and Tamil
Nadu would get a share of 463 MW power, he said.

The Kaiga atomic power project (stage II) with a capacity of 440 MW
would be commissioned during 2007-08 and of this 103 MW would be
allocated to Tamil Nadu, he said. The outlay for the 11th plan period
was Rs 21,159.14 crore and the proposed capital outlay for 2007-08 was
Rs 2910.28 crore, he said.

Under the Rural Infrastructure Development Fund, NABARD had sanctioned
loan assistance to the tune of Rs 63.49 crore. Towards achieving total
electrification of households in rural areas, "in principle" approval
has been obtained from the Centre for schemes in 16 districts, he said.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/SEZ_for_renewable_energy_devices_to_be_set_up_in_TN/articleshow/1847331.cms

MEPZ SEZ exports exceed Rs 2,300-cr mark in '06-07

2007-04-05T11:13:00.001-07:00

ECONOMIC BUREAU
Posted online: Thursday, April 05, 2007 at 0013 hours IST

CHENNAI, APRIL 4 : Fiscal 2006-07 was a successful year for MEPZ
Special Economic Zone (MEPZ SEZ) when it comes to exports. The zone
during the year has done exports of about Rs 2,327.12 crore, which is
about 25.14% over the previous year performance of Rs 1,859.63 crore.
According to the latest figures available with the MEPZ SEZ, the zone
has performed well in almost all sectors except the garments and
textiles and the trading and service units industries. A significant
portion of exports has come from the engineering industry which has done
nearly Rs 680.57 crore working out to about 29.24% of the overall
exports. The industry performance has gone up by about 30% compared to
the previous year exports of Rs 523.59 crore. Electronics and software
industry has done exports of Rs 572.77 crore, only a meagre 7.5% over
the previous year performance of Rs 532.65 crore.

Chemical, plastic and allied industry has done really well during the
year. The units in the segment have done exports aggregating Rs 206.12
crore, registering a growth of 57.21% over the previous year exports of
Rs 131.11 crore. Leather and sports goods industry has also improved its
export performance by 23.86% to Rs 132.06 crore (Rs 106.62 crore). Food,
agriculture and forest products industry exports were higher at Rs 18.01
crore (Rs 7.44 crore), showing an impressive growth of over 142%.

The gems and jewellery units operating within zone have also done well
during the year. They have done exports of Rs 321.77 crore about 203.67%
over the previous year exports of Rs 105.96 crore. This assumes
significance as gems and jewellery units were earlier concentrated only
on the western India.

The textile and garments industry which used to be a major contributor
to the overall exports, was a poor performer during the year as exports
were down to Rs 349.64 crore (Rs 405.70 crore). Similarly exports from
the trading and service units industry declined to Rs 9.01 crore from Rs
14.53 crore in the previous year.

http://www.financialexpress.com/fe_full_story.php?content_id=160174

Notify SEZs sans legal hassles over land acquisition: Maran

2007-04-05T11:12:00.001-07:00

OINEETOM OJAH
Posted online: Thursday, April 05, 2007 at 0000 hours IST

NEW DELHI, APR 4: In a letter to Prime Minister Manmohan Singh last
week, information and technology minister Dayanidhi Maran argued in
favour of notifying all the special economic zones (SEZs), where land
has been acquired without any legal problems.
Maran's letter along with another letter from Chhattisgarh chief
minister Raman Singh will be considered as supplementary agenda during
the empowered group of ministers (eGOM) meeting expected to be held on
Thursday.

Singh, in his letter, contended that huge multi-product SEZs would have
an adverse impact on small-scale industries and demanded capping the
maximum area for such SEZs at 200 hectares.

Sources said, the eGOM will consider putting a cap of 10,000 hectares on
multi-product SEZs. So far there is no ceiling on the upper limit for
land to be acquired for such zones.

Earlier, chief ministers of several states including Tamil Nadu, Andhra
Pradesh, Karnataka, Gujarat and Haryana had mounted pressure on the
Centre by writing to the members of the eGOM on de-freezing the ban on
notification for SEZ proposals where land has been procured without
legal hassles.

The letter of Maran, who is a member of the eGOM, assumes significance
as he had told reporters in Chennai last week that the eGOM meeting
would be held this week. He had also said that the freeze on SEZs is a
hindrance to growth in states like Tamil Nadu, where most of the SEZs
are promoted in the already acquired barren lands. The minister added
that prolonging the ban on notification for SEZ proposals with land will
only send wrong signal to investors who have committed huge investment
in such zones.

Story So Far
• Many CMs want the Centre to de-freeze the ban on notification for SEZ
proposals
• So far, there is no ceiling on the upper limit for land to be acquired
for SEZs
• The eGoM will consider putting a cap of 10,000 hectares on
multi-product SEZs

Over 20 SEZs, which have obtained in-principle and final approvals, have
to be notified in Tamil Nadu. The total land size of most of these
proposed zones are not more than 500 acres.

Meanwhile, none of the proposals for SEZs from West Bengal and those
backed by big names like Reliance or Posco and Tata's Gopalpur project
(both in Orissa), figure in the 84 SEZs which are likely to get the
eGoM's clearance for notification.

The maximum number of SEZs in the list of 84, where SEZ land has been
procured without legal hassles, is from Andhra Pradesh (23). While 14
are from Maharashtra, 12 are from Karnataka.

The important proposals in the list are Maharashtra Airport Development
Ltd's airport-based multi-product SEZ in Nagpur, Bajaj's auto SEZ in
Aurangabad.

Also IT SEZs of Infosys in Pune, Mahindra in Jaipur, HCL in Bangalore,
Satyam in Andhra Pradesh, Parsvnath in Indore and that of NIIT in
Greater Noida, Wipro in Noida, Adanis' power SEZ in Gujarat, Brandix's
apparel SEZ and Lotus's footwear SEZ in Tamil Nadu.

http://www.financialexpress.com/fe_full_story.php?content_id=160119

For a homegrown SEZ model

2007-04-05T11:11:00.001-07:00

For a homegrown SEZ model

There are good reasons for the legislation on special economic zones to be revised

JAYANTA ROY
Posted online: Thursday, April 05, 2007 at 0000 hours IST

I am amazed at the wide-ranging public debate on special economic zones (SEZs) in India, involving the highest authorities in the public and private sectors. I had, of course, expressed reservations in my earlier FE pieces about the futility of experimenting with traditional SEZs that are antiquated in today’s liberalised world. India’s SEZ law, by and large, followed what the Chinese did in the 1980s with a fledgling private sector. India today is not in that situation. The role of the government should have been just that of a facilitator.
Who needs SEZs? Why and what is the track record? What kind is suitable for India? These are the questions that should have been addressed before the law was enacted.

Who needs SEZs? Countries do them to jumpstart global integration faced with high tariffs, red tape, rigid labour laws, low export and FDI bases, complex import regimes and forex regulations, and government control over all aspects of economy. Most of these problems have been tackled in India. Labour laws remain rigid, but these are not addressed even under the SEZ law. Some tax and credit incentives that are included are out of place.

Why does India still need SEZs? It needs them to help generate higher exports and FDI, and provide employment to the masses. SEZs are a good vehicle to achieve these objectives by creating enclaves with first world infrastructure, a greater ease of doing business with minimal government control, and low transaction costs. But the SEZ law falls short of overcoming these problems. There seems to be central government control in several spheres, making the SEZ developers and operators run to the ministry of commerce and industry (MOCI) for a wide range of approvals. We did not learn from our mistakes with earlier experiments with special zones, which were bedeviled by too much government control.

What kind of SEZs makes sense for India? We should move towards the broader concept that covers a large area, provides integrated development and is consistent with the objective of becoming a developed country. SEZs must offer an environment with minimal restrictions/interference, streamlined procedures, sound infrastructure and easy access through world-class sea and airports. All industrial activities should be eligible, with no export requirements. Sales to domestic tariff areas should be allowed, subject to payment of national duties. Permanent visas must be allowed to qualified investors. It should be demand-driven, with bulk of the investment coming from the private sector. Singapore, Hong Kong, Gibraltar and Jebel Ali in Dubai are well-known examples of these large SEZs, also known as freeports. Newer ones are Subic Bay in the Philippines, Labuan in Malaysia, Pudong in China, Batam in Indonesia and Aqaba in Jordan.

In the April 11 meeting of the empowered group of ministers, a decision should be taken to revise the SEZ law in the light of the experience with the modern concept of large SEZs/freeports and growth clusters

To succeed, the head of the SEZ must wield considerable autonomy. This is a far cry from the proposed Indian SEZs where the head is likely to be appointed by the MOCI. The issues of land acquisition, displacement of farmers, fair price to landowners, flexibility in labour laws, safeguard of monetary policy and national security should feature in an SEZ legislation with guidelines based on the best global practices.

To cut our losses, in the April 11 meeting of the empowered group of ministers, a decision should be taken to revise the SEZ law in the light of the experience with the modern concept of large SEZs/freeports and growth poles/clusters. The Shanghai-Suzhou growth pole is currently exporting over $200 billion of merchandise, and $15 billion of services. This is what we need, not a plethora of small, government-controlled SEZs.

For the SEZs in the pipeline, final clearance should be conditional upon the promoters and developers taking the lead in resolving all thorny issues, such as land acquisition, directly with the affected parties. The government should stay away from these contentious issues.

—Jayanta Roy is principal advisor, CII. These are his personal views

http://www.financialexpress.com/fe_full_story.php?content_id=160101

--
Sudarshan Rodriguez

Sudarshan Rodriguez,

Marine Conservation Analyst

Project Coordinator,

Post- Tsunami Environment Initiative

(www.ptei-india.org)

Flat 2B, Adithya Apartments,

38 Balakrishna Road,

Valmiki Nagar, Thiruvanmiyur,

Chennai-600 041

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Email: sudarshanr@yahoo.com

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SEZs back on track, cut to size

2007-04-05T11:08:00.000-07:00

PRESS TRUST OF INDIA
Posted online: Thursday, April 05, 2007 at 1538 hours IST
Updated: Thursday, April 05, 2007 at 1634 hours IST

NEW DELHI, APRIL 5: Bowing to political pressure, the Centre on
Thursday decided that no SEZ would be allowed beyond 5,000 hectares of
land and states will not acquire land for industry.
In the middle of a raging debate on SEZ policy, especially in the wake
of the Nandigram violence, the empowered Group of Ministers took these
decisions.

At the same time, the eGOM, headed by Foreign Minister Pranab Mukherjee,
gave a clear signal that new SEZ norms would not compromise the
industrialisation process and lifted the freeze, clearing 83 new projects.

"No state can compulsorily acquire land from farmers through Land
Acquisition Act," Commerce Minister Kamal Nath said, adding that
promoters would have to themselves go to farmers and acquire land at
commercial rates.

Further, the states would be empowered to reduce the size of SEZs below
the 5,000 hectare limit set by the Centre.

Nath said under the new Relief and Rehabilitation Policy, which would be
finalised soon, at least one member of the displaced family would have
to be employed in the project.

This would be in addition to the compensation paid to farmers.

With the freeze lifted, the government would approve all pending
applications where there is no land dispute.

The decision on limiting the size would hurt plans of companies such as
Reliance Industries, besides real estate players DLF and Omaxe, which
plan to set up mega SEZs.

http://www.financialexpress.com/latest_full_story.php?content_id=160204

Gurgaon farmers to move SC against land transfer

2007-04-02T00:40:00.003-07:00

DIPAK KUMAR DASH

TIMES NEWS NETWORK[ SUNDAY, APRIL 01, 2007 03:16:37 AM]

GURGAON: Even as the anti-SEZ front threatens to stage a protest on
Sunday against West Bengal chief minister Budhadeb Bhattacharya's visit
to Delhi, trouble over a SEZ (special economic zone) is brewing near
Gurgaon.

Farmers from five villages near Garhi Harsaru in Gurgaon — Khandsa,
Narsinghpur, Mohammedpur, Gadauli and Harsaru — are opposing the
transfer of 1,395 acres of land to Reliance Industries by Haryana State
Industrial and Infrastructure Corporation (HSIIDC) for setting up a SEZ
in the region.

Alleging that HSIIDC was cheating them by giving the land to Reliance as
it had been acquired by them solely for industrial development in this
region, these farmers have now decided to take the issue to Supreme Court.

Ironically, the protest comes a few days after a survey conducted by a
private agency had claimed that 75% of the farmers in Haryana were
satisfied with the compensation package of the state government for
developing a SEZ.

''We are ready to face anything to save our land from being transferred
to Reliance,'' said Chetan Chauhan, a member of Harsaru Panchayat. He
said farmers sold the land to HSIIDC at a revised rate of Rs 20.75 lakh
per acre.

''But this is nothing in comparison to what the company is paying to
farmers directly which is crores,'' said Rao Srikrishan of Harsaru.

The farmers say that since the HSIIDC did not acquire the agricultural
land for a SEZ, they have no right to transfer the land the company.
''Even as Union Commerce minister Kamal Nath says that no fertile land
should be acquired for SEZ, HSIIDC has gone ahead,'' said an angry
Dharambir Yadav, ex-sarpanch of Garhi village.

The agitation against the administration and Haryana government,
meanwhile, is gathering steam. Recently, the angry protesters threw
stones at bulldozers sent by the administration to demolish structures
falling in the upcoming SEZ region.

Both the government and HSIIDC maintain they are not doing anything
illegal. ''The government has not acquired a single inch of fresh land
for SEZ. This particular patch was acquired during the tenure of the
previous government.

Now it's for us to transfer that land to Reliance Industries as part of
our joint venture agreement,'' said a senior HSIIDC official. He added
that the agreement had been signed in June and there had been no protests.

dipak.dash@timesgroup.com

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Gurgaon_farmers_to_move_SC_against_land_transfer/articleshow/1839905.cms

Kerala zeroes in on animation SEZ

2007-04-02T00:40:00.001-07:00

CHHAVI DANG

TIMES NEWS NETWORK[ SATURDAY, MARCH 31, 2007 03:13:40 AM]

MUMBAI: Apart from tourism, Kerala will soon have another claim to fame.
Sensing there is a huge potential in the Indian animation industry that
needs to be tapped, the government of Kerala has procured around 25
acres of land in an SEZ that would later be converted into an animation
zone.

Kinfra, the Kerala Industrial Infrastructure Development Corporation, a
statutory body of the state government, is developing this park where it
expects some 50 large animation studios from major centres to move in.

"This is the second phase of development happening in the park and we
have decided to make it an exclusive animation SEZ. It is the first of
its kind in India," claimed K Sudhakaran, project manager, Kinfra films
and video park. Kinfra has invested Rs 2.5 crore in land procurement (Rs
10 lakh per acre) and has plans to sell it at Rs 26 lakh per acre.

"The whole idea is to give a fillip to the animation outsourcing
industry in Kerala because once the studios move in here, they will be
exempted from tax as per the SEZ norms," said Sudhakaran.

Though Kinfra's target is to house at least 50 big studios, an MoU has
been signed with animation studios like Toonz Animation, Dimensions,
headquartered in Kerala, and Chandigarh-based Compact Disc. It's also in
talks with Chennai-based Accel Animation Studios, a mobile gaming and
animation company, for the animation SEZ, which will be operational in
three months.

Explaining the process of space logistics, Sudhakaran added, "The land
is available on a long lease basis (90 years). Around 1,50,000 sq feet
is the built-up area with 10,000-15,000 modules for the studios." These
modules are available at the rate of Rs 20 per sq ft per month. Apart
from this, Kinfra has also set up an incubation centre in about 500 sq
ft of this land.

This incubation centre is available with a plug-in facility for small
companies who can't afford to start a full-fledged facility. "Small
companies can really leverage this facility. All they have to do is to
plug in their computers and get going. All this, for Rs 35 per sq feet
per month," he added. The agency is expecting a turnover of Rs 150 crore
from the animation SEZ in the first year itself and expects it to go up
to Rs 1,000 crore over the next three years.

The industry players are also excited about the idea. Munjal Shroff,
director and COO, Mumbai-based animation studio Graphiti Multimedia,
said, "If there is an animation SEZ coming up in India, we will move in
there, as this will benefit our business." PricewaterhouseCoopers (PwC),
which tracks the media and entertainment industry, said this was a good
opportunity and would give a boost to the industry. PwC, in its recently
released report, has estimated the animation industry to be worth Rs 11
bn with a CAGR growth rate of 22% to reach Rs 29 bn by 2011.

Kinfra is also looking at establishing state-of-the-art animation
academy to meet the increasing manpower demand in this field. "The
school will be based on a public-private partnership model, with an
equal amount of funding being provided by the Centre, the Kerala
government through Kinfra, and a private player," Sudhakaran said.

Kinfra is now in talks with both Toonz and Accel. The total investment
in the academy would be Rs 20.5 crore. Timmy Kandhari, executive
director, entertainment and media practice, PwC, said, "An initiative of
this kind will provide a ready talent pool to the industry." Going
forward, co-producing animation films with foreign partners is the way
up for the industry, he added.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Kerala_zeroes_in_on_animation_SEZ/articleshow/1835779.cms

Say it for SEZ

2007-04-02T00:23:00.000-07:00

Rescue a good idea from Luddite politics

Posted online: Monday, April 02, 2007 at 0000 hours IST

The government would have to think clearly and act quickly if we are to,
as promised by P Chidambaram in China, develop special economic zones
(SEZs) in "our own way". As SEZs begin to look exclusively like a land
acquisition issue, a wider discussion about jobs, infrastructure and
growth multipliers has been reduced to a sterile farmer-versus-industry
debate. SEZs, sadly, have been projected by some politicians as some
kind of land grab. This is an irresponsible accusation in a country
where almost two-thirds of the population still works on land. Ruthless
CPM politics that resulted in the Nandigram tragedy has had its effect.
Bengal politics may be sui generis, and other states don't suffer from
such methods, but the demonstration effect seems to be hurting the case
for SEZs elsewhere too. There is now talk of halving the size of the SEZ
near Mumbai. If good infrastructure is integral to SEZs, then there is
no point in reducing their size to a few hundred hectares. We need large
SEZs that invigorate the landmass around them and have far-reaching impact.
With Rs 60,000 crore of investment planned, the importance of SEZs
cannot be overstated. So, what should the government do to repackage and
resell the SEZ concept as a credible instrument for raising output and
aam aadmi incomes? The first step should be to publicise SEZs where land
has been acquired without a hitch. Some good publicity is urgently
required. Second, SEZ developers should be encouraged to acquire land
though direct negotiations with landholders. Developers can and should
incorporate innovative strategies to answer questions of small
landholders especially. Corporates should also be encouraged to set up
commercial 'collectives' of displaced persons, as has been creatively
done by the Tatas at Singrur, to supply labour and resources for
construction work at the project site. That would ensure the displaced
have a stake in the new venture. But it is also true that investors
won't wait endlessly for this positive process to begin. The push has to
come from the government. Rescue SEZs from Luddite politics.

http://www.financialexpress.com/fe_full_story.php?content_id=159755

Freeze on SEZs has upset investors: Maran

2007-03-31T03:27:00.001-07:00

Staff Correspondent

Urges Centre to relax norms or clear proposals

CHENNAI : Union Information Technology and Communications Minister
Dayanidhi Maran on Friday expressed the hope that Special Economic Zones
(SEZs), which have been approved but put on hold in Tamil Nadu due to
controversy over land acquisition in various states, would be given the
go-ahead as most of them were being set up on land belonging to the
Small Industries Promotion Corporation of Tamil Nadu (SIPCOT).

He said some investors with major plans in the State, especially in
manufacturing sector, were upset over the freeze and might explore the
option of moving to countries like Vietnam if the Government did not
relax the norms or lift the freeze.

Mr. Maran, who was part of the empowered Group of Ministers headed by
External Affairs Minister Pranab Mukherjee, said the committee would
meet next week to discuss issues related to SEZs including relaxation of
norms.

After the inauguration of Kerry Reliable Logistics, he told reporters
here that there were over 20 SEZs, which had obtained in-principle and
final approvals and were to be notified in Tamil Nadu. He urged the
Centre to relax norms or clear SEZ proposals where land acquisition was
not an issue.

Mr. Maran said the land component of any SEZs in Tamil Nadu was not more
than 500 acres. The State had promoted compact SEZs on 200-250 acre
plots acquired by the SIPCOT, the nodal agency to implement
infrastructure development schemes. He said Chief Minister M.
Karunanidhi had written to the Prime Minister, noting that big investors
like Feng Tay Enterprise and Nike Shoes' OEM supplier might move out of
India if the uncertainty continued.

Last year, Hong Kong headquartered Growth-Link Overseas Company, a
subsidiary of Taiwan-based shoe major Feng Tay Enterprise Co Ltd. and
leading original equipment manufacturer supplier to Nike, announced
plans to invest Rs. 300 crore in setting up a shoe manufacturing
facility on over 300 acres at Cheyyar, 90 km from Chennai.
http://www.hindu.com/2007/03/31/stories/2007033119920800.htm

Simmering discontent over SEZs

2007-03-31T03:21:00.001-07:00

S. D. NAIK

The consensus among experts seems to be that the economic and other
costs of SEZs are likely to outweigh the so-called benefits because of
the way the rules have been formulated and the loopholes in the policy.
The RBI has, thus, stated that SEZs be treated as commercial real estate
rather than as a priority sector proposition for bank lending, says S.
D. NAIK.

No other major policy of the Government in recent years has been mired
in such unending controversies and sharp inter-ministerial differences
as that on Special Economic Zones (SEZs). The simmering discontent over
the policy in many quarters came into sharp focus after the Nandigram
incident in West Bengal where 12 persons were killed in police firing on
a violent mob. Following the unfortunate incident, the situation became
explosive with nation-wide ramifications.

There are now indications that some of the approved SEZs in other States
may also face trouble. For instance, in Maharashtra, the Finance
Minister, Mr Jayant Patil, has voiced his opposition to his own
government's policy on the issue. Besides making it clear that farmlands
should not be acquired for setting up SEZs, he expressed unhappiness
over too many sops being offered to these zones when no consideration is
being shown to the country's 150 backward districts.

FLAWS AND SHORTCOMINGS

Though much of the public criticism of SEZs, of late, has centred on the
land acquisition process, right from the beginning, the policy has been
riddled with flaws and shortcomings. The overwhelming consensus among
experts seems to be that the economic and other costs of SEZs are likely
to outweigh the so-called benefits because of the way the rules have
been formulated and the loopholes in the policy.

Many have termed the proposed SEZs as real-estate ventures rather than
production and export zones. For the rules require that only 35 per cent
of the area in a SEZ be devoted to productive activity and a developer
can use the rest of the land to build apartments, hotels and commercial
offices.

Not surprisingly, the Reserve Bank of India (RBI) has stated in no
uncertain terms that SEZs must be treated as commercial real estate
rather than a priority sector proposition for bank lending.

The SEZ Act was passed in 2005 and the Commerce Ministry notified the
SEZ law in February 2006. What is most surprising is the unprecedented
rush of applications since then and the speed with which the Ministry
granted some 200 in-principle approvals.

It even succeeded in getting the cap on the number of SEZs removed
despite opposition from the Finance Ministry which was worried about the
estimated revenue loss of Rs 140,000 crore on account of tax exemptions
on raw materials and finished products.

Though India's SEZ policy is said to be modelled on the Chinese
experiments, there is no comparison either with the economic conditions
of the time, the size and location of the zones, their numbers or the
kind of giveaways.

China started with only four SEZs and now has six. It had much greater
compulsions to set up SEZs in its totalitarian regime so as to ensure
its calibrated integration with the global markets by attracting
large-scale foreign direct investment. The conditions in today's India
are different.

GROWING OPPOSITION

The opposition to SEZ policy in its present form has come from several
experts and institutions, including the Ministry of Finance, Ministry of
Rural Development, and the Reserve Bank of India. Dr Jagdish Bhagwati of
Columbia University, the world's most ardent advocate of globalisation,
feels that India does not need SEZs.

"We don't need to learn lessons from China any more, because the main
lesson was outward orientation. We should concentrate on making the
additional reforms for reducing trade barriers."

In September 2006, the then IMF Research Director, Mr Raghuram Rajan,
described India's SEZ policy as a tax give-away that was likely to shift
Indian production to SEZs rather than create new economic activity. He
expressed his opposition to misdirected subsidies, guarantees and tax
sops that a stretched budget could ill afford.

Reservations about the SEZ policy in its present form have also come
from others including Mr Rahul Bajaj, Chairman, Bajaj Auto Ltd; Mr
Narayana Murthy, Chief Mentor, Infosys; and Mr Montek Singh Ahluwalia,
Deputy Chairman, Planning Commission. While Mr Rahul Bajaj suggested
export obligation of 60-75 per cent of production, 60-75 per cent land
for production units and fairer land acquisition process, Mr Murthy has
warned against roping real-estate players into SEZs.

DAMAGE-CONTROL MEASURES

This has now become a classic case of a government announcing a policy
in haste and resorting to a damage-control exercise in instalments as
more shortcomings and gaps in the policy become evident with each
passing day.

That the SEZ approvals in some cases are becoming real-estate scams has
become evident from the emerging evidence of a secondary market in such
zones. According to reports, the zones that have been approved are on
sale at a premium.

The mind-boggling rush of applicants and the number of approvals itself
is sufficient to raise doubts about the intent and purpose of the
developers. Many of the promoters, including politically well-connected
business houses, were sanctioned land to set up SEZs at amazing speed.
However, with SEZs becoming the zones of contention, efforts seem to be
on to restrict the number of such zones by inserting new rules and clauses.

For instance, the validity period of in-principle SEZ approvals has been
reduced from three years to one year.

According to new rules announced by the Centre, developers of SEZs will
have to rehabilitate displaced farmers and landless farm workers.
Moreover, they may have to get the approval of local authorities such as
the Gram Sabha for starting their projects.

It has been notified that the final approval from the Government will
come only after the developers obtain a nod from local authorities.

NEED FOR A FRESH LOOK

Though it may appear too late, considering the serious flaws and
shortcomings that have come to the fore, the Government would do well to
take a fresh look at its SEZ policy. The Prime Minister, Dr Manmohan
Singh, has already indicated that the Government would not hesitate to
correct itself if it had erred in the SEZ policy. What is needed,
however, is a complete recast of the policy and not just a few corrections.

SEZs may have had some rationale some 15-20 years ago. But in today's
India, there are no such compulsions to go for special enclaves at a
time when exports are growing at a healthy rate, the economy is on a
song and foreign exchange reserves are poised to cross the $200-billion
mark.

Our real concern now should be about the growing regional disparities,
the impoverishment of the countryside and the fast-widening rural-urban
divide.

At the most, the country may need 20-30 large integrated zones, each
with several 100 square km area, away from major cities and towns that
are strategically located.

They should be provided with only a few select fiscal incentives but
should be well connected to cities and ports by highways, rail and air.
Moreover, it should be ensured that such zones help create externalities
or economies of scale for the country's hinterland aimed at balanced
regional development.
http://www.thehindubusinessline.com/2007/03/31/stories/2007033100130800.htm

EGOM to discuss SEZ issues next week

2007-03-31T03:17:00.001-07:00

Saturday March 31 2007 01:54 IST
CHENNAI: An empowered group of ministers headed by External Affairs
Minister Pranab Mukherjee is expected to meet next week to discuss and
analyse issues of special economic zones and relaxation norms for such
SEZs, Union Minister of Communications and IT Dayanidhi Maran said here
on Friday.

He was speaking to media persons on the sidelines of the launch of a
joint venture between Reliable Freight Forwarders Pvt Ltd and Hong
Kong-based Kerry Logistics Network.

Maran was hopeful that SEZs which had been approved in Tamil Nadu but
were put on hold due to the controversy over land acquisition in various
states would be given the green signal as most SEZs in the state were
being set up on land belonging to the Small Industries Promotion
Corporation of Tamil Nadu (SIPCOT).

He added that companies that had shown interest in setting up their
units in these SEZs were upset at the delay. "We are the ones who will
suffer as we have been successful with SEZs. Also we have no issues with
land here," he said.

Maran said there were about 20 SEZs in the state and most of them could
not make progress on work due to these problems. Maran also hoped that
sizes of SEZs would not only be 1,000 or 500 acres but also as small as
200 or 300 acres. He also invited investors to not only invest in real
estate but the IT industry.

The new JV company known as the Kerry Reliable Logistics Pvt Ltd in
India will offer comprehensive logistics support in Tamil Nadu. The
Kerry group also has plans for new projects to be implemented in the
country.

Managing Director, Reliable Freight Forwarders, J Antony Sekar, said the
company had its network spread in all important locations in the country.
http://www.newindpress.com/NewsItems.asp?ID=IEB20070330153243&Title=Business&rLink=0

SEZs to use just 0.1% of total farm land: govt

2007-03-31T03:16:00.000-07:00

ARUN S
Posted online: Saturday, March 31, 2007 at 0000 hours IST

NEW DELHI, MAR 30 : The special economic zones cleared so far will use
just 0.1% of India's total farm land, says the government. The country
has a total 15,34,166 sq km of agriculture land and the 396 approved
SEZs will occupy just 1,750 sq km.
Of the total land mass, the SEZ territory works out to just 0.06%. The
total land area of India is 29,73,190 sq km, according to government data.

To allay fears that fertile land will be used for setting up SEZs
imperiling farmers, the government makes a comparison with the Hainan
project in China. This SEZ is spread over 34,000 sq km. The Shenzen SEZ
has come up over 327 sq km and the Xiamen SEZ occupies 131 sq km.

The Centre has been put to sword by various quarters which allege that
agriculture land is being acquired for SEZs. With this data, the
government hopes to drive home its point that the impact of SEZs on the
country's farm land will be negligible.The total area for the 234 SEZs
having formal approval is 350 sq km (including 67 sq km for the 63
notified SEZs), while the total land area proposed to be used for 162
SEZs with approval in principle (where land is yet to be acquired) is
1,400 sq km, according to the commerce ministry. The total agriculture
land is 51.6% of the country's total land area and the total
non-agriculture area is 14,39,204 sq km.

The ministry says, of the 350 sq km to be used by the 234 SEZs with
formal approvals, around 178 sq km are already with State Industrial
Development Corporations.

Rare Earth
• The country has a total
15,34,166 sq km of agriculture land and the 396 approved SEZs will
occupy just 1,750 sq km
• Of the total land mass, the SEZ territory works out to just 0.06%. The
total land area of India is 29,73,190 sq km

Currently, 1,016 businesses are operating out of SEZs, providing direct
employment to more than 1.79 lakh people, of which about 40% are women,
says the government. In the 63 notified SEZs set up after February 2006,
investments worth Rs 13,435 crore have been made and 18,457 people
directly.

The commerce ministry projects that by December 2009, the 63 notified
SEZs will draw investments worth Rs 53,561 crore and provide employment
to 15,75,452 more people. If the 234 SEZs with formal approvals become
operational, they will bring in investments worth Rs 3,00,000 crore and
create an additional 4 million jobs.

The ministry says, of the 234 formal approvals, 80 were for SEZs in
sectors like textiles & apparels, leather footwear, automobile
components and engineering, involving labour-intensive manufacturing. In
2005-2006, the total exports from SEZs that are already operating were
$5.078 billion -- a 24.71% growth over the previous year's $4 billion.

The government projects that exports by the 19 old SEZs and the 63 newly
notified ones in 2007-08 will be worth Rs 67,300 crore and the figure
will cross Rs 100,000-crore mark by 2008-09.

http://www.financialexpress.com/fe_full_story.php?content_id=159575

The SEZ relay: Tax hurdles

2007-03-29T23:11:00.001-07:00

[ FRIDAY, MARCH 30, 2007 12:00:00 AM]

Vikram Bapat & Shilpa Shanbha

The Special Economic Zone (SEZ) is no less than a phenomenon that hit
India with battering impact in these last few months. As the baton
passes back and forth there is yet one runner waiting patiently for the
baton to pass to him—the taxman.

The insertion of Section 10AA in the Income Tax Act, 1961 ('Act'), has
effectively forced a clearly reluctant finance ministry to run the race.
Whereas the February 28 annual fair ushers in most of the tax offering
to the public at large through the Finance Acts, section 10AA originates
from the SEZ Act, 2005, thus forcing the finance ministry in the relay
and out of its monopoly.

Once the current controversial dust settles, we hope that India is truly
poised to set up world class infrastructure to usher an era of sustained
exponential growth. That's when the entrepreneurs or units will set up
and then will start the inevitable battle with the taxman.

Quantum of deduction

In 2000, Finance Minister Yashwant Sinha had proposed to delete sections
10A and 10B from the Act. Pandemonium broke loose. Eventually public
opinion prevailed and the sections were reinstated in the statute book
in a new avatar. This version raised the first controversy that—lo and
behold!—is back to haunt us in section 10AA.

To elucidate, the deduction is to be computed in the manner provided in
the section. The formula stipulated is that the profit derived from the
export of articles, things or services (including computer software)
shall be the amount which bears to the profits of the business of the
undertaking, being the unit, the same proportion as the export turnover
in respect of such articles or things or services bears to the total
turnover of the assessee.

This raises the first major controversy. How will an entrepreneur or a
company having multiple units or units with diverse activities, one of
which is a unit in an SEZ, calculate the available deduction? The
application of the formula will result in a reduction of the available
deduction because of the ratio between export turnover and total turnover.

Whereas, export turnover is only of the SEZ unit as the numerator, the
denominator is the total turnover of all units of the assessee in the
aggregate. This is also inconsistent to the extent that whereas the
profit is of a specific unit, basis of allocation (particularly the
denominator) is for the business as a whole.

You may recall that this anomaly also existed in the re-introduced
section 10A/10B but was promptly amended by specifying that the total
turnover will also be only of the singular unit. This amendment has not
happened thus far in section 10AA—until then it will be anybody's guess.
Let's move on.

Migration of units

Existing IT/ITeS units are looking to SEZ to bridge the fiscal gap that
is staring in their face effective March 2009 (rumours of an extension
notwithstanding). Migration is the buzzword for the business but is
taboo for the authorities. It won't be long before our abominable taxman
picks it up either. But do they have a case?

The first interesting departure from the section 10A/10B norm that was
that certain restrictive conditions don't find a place in section 10AA.
There were no conditions stipulated that units should not be formed by
the splitting up or reconstruction of a business already in existence.

Neither was there a condition that the unit should not be formed by the
transfer to a new business of machinery or plant previously used subject
to a cap of 20% of the value. Let us put the second condition at rest.
If it is not in the tax law it is very clear from the SEZ rules itself
that no unit can be registered as an SEZ unit if it proposes any
machinery or plant previously used in any area outside of an SEZ.

No limits either. The tax law therefore is immaterial. The critical
difference now is the question—can the unit transfer its employees from
an existing unit to a new unit in an SEZ. There is no apparent
restriction to this whatsoever at least in the SEZ law.
Conclusion—migration with substantial expansion in an SEZ would have
been a distinct possibility—until Budget 2007.

It is now proposed that the restrictive conditions of section 10A/10B be
inserted in section 10AA as well. Should this become law (and in all
likelihood it will be) the question of migration perhaps is finally
nipped in the bud and is likely to be a non starter. Perhaps, just as
well. This is one step towards achieving the primary goal—incremental
economic growth and not merely shifting of existing economic resources.

Export from an SEZ

The dichotomy between business realities and revenue collection may just
come to the fore in the provisions of section 10AA that deal with what
can be construed as "export turnover" for the purpose of the section.
There are some differences of opinion even in the current section 10A
regime but section 10AA holds greater potential for the taxman to turn
yet another step away from business reality. Here's why.

"Export Turnover" is defined in the Act to mean the consideration in
respect of export by the undertaking, being the unit of articles or
things or services received in, or brought into, India by the assessee
but does not include certain charges or expenses. Seems quite straight
forward.
However, there is yet another definition; "Export in relation to the
SEZ" has been defined to mean taking goods or providing services out of
India from an SEZ by land, sea, air or by any other mode, whether
physical or otherwise. Interestingly, this definition is not referred to
or does not find place anywhere in the rest of the section.

What, therefore, is its significance? The significance may be understood
in the context of sub-contracting by an SEZ unit that is extensively
permitted by the SEZ Act and Rules. Take this example.

What if an SEZ unit manufactures a product and sends it out for
specialised packing to a third party contractor for onward export on
behalf and on account of the SEZ. Would the letter of the law require
that the goods be necessarily sent back to the SEZ because of the "from
the SEZ" condition? From a business perspective, it would be illogical
and uneconomical for the packed products to be sent back to the SEZ unit
for onward export just because the tax law says so.

This example is by no means the end of all. As units start taking shape,
many more issues will be raked up by the taxman particularly after
Budget 2007 amendments see the light of day. We may have just one point
to put forward our case.

Section 10AA takes birth from the SEZ Act and hence it stands to reason
that as long as the units undertake "authorised operations" as laid down
in the SEZ Act, there should be no reason why the taxman should deny a
legitimate tax benefit. It fact, there is every reason for the tax
authorities to assume good faith as soon as the authenticity of the SEZ
registration is proved. Otherwise, this may result in a miscarriage of
justice.

(Mr Bapat is associate director & Ms Shanbha is associate,
PricewaterhouseCoopers)
http://economictimes.indiatimes.com/News/Economy/Policy/The_SEZ_relay_Tax_hurdles/articleshow/msid-1830254,curpg-3.cms

HC adjourns Nandigram case by three weeks

2007-03-29T23:03:00.001-07:00

Our Legal Correspondent

Kolkata March 26 A Division Bench of the Calcutta High Court comprising
the Chief Justice, Mr S.S. Nijjar, and Mr Justice P.C. Ghose on Monday
adjourned the Nandigram violence case for three weeks. While doing so,
the court observed that after considering the affidavits filed by 11
parties in the case, it will consider paving an appropriate order.

One of the counsel sought for further CBI investigations at Nandigram
but the court did not pass any order based on this.

The court, however, directed the CBI to keep the collected evidence
reserved in a sealed cover, to be used when the court requires it.

Another advocate sought the court's order directing the State Government
to produce the suggestions made by the Centre to the State on the
Nandigram situation.

Earlier, on March 15, the court on its own, following the public
interest litigation, directed the CBI to investigate the Nandigram
massacre and also directed the State Government to file an affidavit
stating why such an incident happened.

On March 22, the CBI filed the report related to their investigations to
the court.

http://www.thehindubusinessline.com/2007/03/27/stories/2007032702051100.htm

SEZs in a flux

2007-03-29T22:56:00.000-07:00

SEZs in a flux

As a topic, SEZ (Special Economic Zone) has turned out to be a knotty
issue. The Chinese model has `land'ed itself in trouble closer home. So
much so, the Commerce Ministry is hurriedly considering changes to the
SEZ Rules in the aftermath of Nandigram tragedy. And, in all
earnestness, http://commerce.nic.in offers a chat facility on SEZ,
`every working day' for an hour from 5 p.m.

To be equipped for an intelligent discussion on SEZ, take the help of
Treatise on Special Economic Zones, by Kanu Doshi and Yogesh Ashar, from
Snow White Publications Pvt Ltd (www.swpindia.com).

The Foreword by Nayan Patel, President of Indian Merchants' Chamber,
concedes that the SEZ policy has stirred up `certain vexed issues that
need to be addressed'. Such as: `the demand to regulate use of farm land
for industrial purposes, valuation of land under acquisition,
compensation to farmers, role of State in all of these, and so on'.

The preface notes that concessions and tax exemptions for SEZs `have
lured businessmen in India and even from across the world to set up
manufacturing hubs in India involving massive investments'. The authors
advise Indian industry `to summon managerial skills of the highest
standards for successful SEZ forays'.

While explaining the `multi-layer system' for acquisition of land for
SEZ, the authors cite from recent news and judgments. One is about
Commerce Minister Kamal Nath's exhortation to industry (expressed in a
September 2006 interview) to accept that agriculture land cannot be
acquired for SEZ purposes. "In his view, the SEZ Act is not meant to be
a real estate legislation. At the same time, he also stated that
imaginary concerns should not hurt employment generation in the country.
He also averred that land acquisitions should be between a willing
seller and willing buyer." Alas, willingness can often be engineered.

The book devotes separate chapters to the establishment of SEZ,
constitution of Board of Approval, special fiscal provisions for SEZs,
modifications to the Income-Tax Act, forex requirements and monitoring,
and circulars/notifications. Part 2 of the book is on State government
policies relating to SEZs.

Appendices contain valuable information, and text of key decisions. The
Gujarat High Court's verdict (unreported) in Shah Kantilal Depar vs
Reliance Infrastructure Ltd is one such. The petitioners, in this case,
were `residents of various villages of District Jamnagar', and the
target of their grievance was Reliance's new refinery.

The court dismissed the PIL (public interest litigation) holding that
there was no loss to the aggrieved agriculturists `since only 12 per
cent of the total land would be affected'. The court also upheld the
Report of Experts that the acquired land were `not fertile lands', and
that delaying the project would cause `huge financial loss for the
company and loss of huge benefits to be accrued to the Revenue and loss
of job opportunities to the unemployed... '

Topical read for leading edge professionals.

The book begins by explaining each of the sections in the SEZ Act, 2005.
For instance, the word `services' is elaborately dealt with. Section
2(z) defines `services' as tradable services which are covered under the
GATS (General Agreement on Trade in Services) and prescribed by the
Central Government, and which earn foreign exchange. Section 2(m)
defines `export' as taking goods or providing services out of India,
from SEZ. List of services, as in Rule 76 of the SEZ Rules, 2006, and
the definition of `service' as found in precedents and other legislation
have been painstakingly compiled, to provide the context.
http://www.thehindubusinessline.com/2007/03/29/stories/2007032900480900.htm

Government cautious on SEZs

2007-03-29T22:48:00.001-07:00

Special Correspondent

Says it is up to the promoters to acquire the land and then seek approval

--------------------------------------------------------------------------------

Priority for SEZs coming up in backward areas
They are likely to generate 10 lakh jobs
--------------------------------------------------------------------------------

BANGALORE: The Karnataka Government is cautious on granting approval to
Special Economic Zones obviously after what has happened in West Bengal.

Minister for Industries Katta Subramanya Naidu replying to questions of
N.H. Shivashankar Reddy and others during Question Hour in the
Legislative Assembly on Monday said the State Government would not be a
party to acquiring land for the SEZs.

It was for the promoters of SEZs to acquire the land and approach the
Government for approval. This meant that the promoters had to pay market
price to the landowners.

He said approval for new SEZs had been kept on hold by the Centre for
the last six months pending report of the Group of Ministers (GoM).
There was lacuna in the rules framed by the Centre on SEZs, which
permitted real estate development.

The Minister said the State Government was keen on forming SEZs on its
own, particularly in Gulbarga and Bidar.

Among the 29 SEZs approved for the State so far, the Karnataka
Industrial Area Development Board had obtained permission for one SEZ
for the IT sector on 203 hectares of land with an investment of Rs. 49
crore, another SEZ for the automotive sector to come up at Shimoga on
169 hectares of land and with an investment of Rs. 38.61 crore and a
third for the food processing sector in Hassan on 15.73 hectares of land
with an investment of Rs. 534.58 crore. He said three of the 29 SEZs
approved so far had started functioning. Of the 29 SEZs, 19 were in
Bangalore Urban District, two each in Mangalore and Bangalore Rural
district, three in Hassan and one each in Shimoga, Belgaum and Mysore.

The anticipated investment in the 29 SEZs was over Rs. 14,000 crore of
which the domestic investment alone was Rs. 13,300 crore.

Thus, the foreign direct investment in the SEZs was not more than 10 per
cent of the total anticipated investments.

The SEZs were expected to provide job opportunities to nearly 10 lakh
people.

To another question of R. Roshan Baig, the Minister said the KIADB had
sanctioned 1,183 acres of land to the multinational companies in the
industrially developed areas adjoining Bangalore.

Water scarcity

Earlier, Deputy Chief Minister B.S. Yediyurappa, said the Government
would release adequate funds to mitigate the acute water scarcity in
several parts of the State.

Funds would not be a constraint in providing drinking water supply, Mr.
Yediyurappa added.

http://www.hindu.com/2007/03/27/stories/2007032703010300.htm

ADB: tax sops for SEZs unnecessary

2007-03-29T22:45:00.000-07:00

Special Correspondent

NEW DELHI: The Asian Development Bank (ADB) on Tuesday joined ranks with
the critics of Special Economic Zones (SEZs), saying that the tax
incentives being offered by the Government to such developers and the
units in these zones were "unnecessary".

Noting that such tax breaks were "unnecessary," the bank's report,
"Asian Development Outlook 2007," said: "SEZ tax inducements are
expensive, and come at a time when the Government is struggling to
provide adequate infrastructure in the wider economy".

According to estimates by the National Institute of Public Finance and
Policy (NIPFP), the Government is expected to lose about Rs. 1,00,000
crore in revenue on account of fiscal concessions to SEZs.

The ADB report pointed out that the special tax incentives would open
loopholes for tax evasion and undermine investments in firms located
outside such zones, as these units would suffer from "worse
infrastructure and higher taxes."

Instead, better infrastructure and more bureaucratic efficiency in SEZs
would be sufficient to stimulate investment, the report said.

http://www.hindu.com/2007/03/28/stories/2007032819961800.htm

Opposition to SEZ pays dividends for PWP, Sena in Raigad

2007-03-29T22:44:00.001-07:00

Meena Menon

Tie-up between Peasants and Workers Party and Shiv Sena led to a
thumping victory in the Zilla Parishad polls in Maharashtra

--------------------------------------------------------------------------------

``PWP has a long tradition of grass roots work in the area''
Congress wins 6 seats compared to 5 last time
--------------------------------------------------------------------------------

MUMBAI: The opposition to proposed Special Economic Zones (SEZs) and
industries, including the Reliance Group-promoted Mumbai Special
Economic Zone (MSEZ) in Raigad district, has paid political dividends
for the two parties in the area who tied up for the recent elections to
zilla parishads.

While load shedding and farmers' suicides did not prevent the Congress
from performing well in the State, in Raigad, a tie-up between the
Peasants and Workers Party (PWP) and the Shiv Sena led to a thumping
victory for them.

Most politicians do not deny the impact of grass roots campaign with the
farmers and fisherfolk who stand to lose if the SEZs are set up. Senior
PWP leader N.D. Patil, who led a rasta roko last Friday against the SEZs
in Raigad district, said the poll results reflected people's anger on
the issue.

In a region where over 70 per cent of the people are small farmers or
fisherfolk, agriculture is the mainstay. The land being acquired for the
SEZ is used for paddy cultivation. The PWP has a long tradition of grass
roots work in the area, said the local MLA, Vivek Patil. ``We have been
working with the people for a long time and we have stood for certain
values in the district," he said. Sena leaders such as Manohar Joshi and
Ramdas Kadam extended their support to the agitation.

Although A. R. Antulay, Congress MP and a Union Minister who is from
Raigad campaigned for his party during these local elections, it did not
make much of a dent. Mr. Patil said the Congress had not really been
sensitive to people's issues and they were too scared of losing out on
contracts and power if they did. They have never been on the side of the
farmers, he said. The other factor against the Congress was that it had
never explained what the SEZs meant and how people could benefit.

This aspect has definitely worked to the PWP and Sena's advantage. The
PWP gained by winning 26 seats and Sena with 16, of the total 61 in the
ZP. Earlier too, the PWP and the Shiv Sena worked together for about two
years to run the Zilla Parishad. The only issue they differed on was
``Hindutva,'' said Mr. Patil, adding that the tie-up did not affect his
party's secular image up. There were more important battles to be
fought, he felt.

Mr. Patil says that both the PWP and the Sena are cadre-based parties
and close to people. The Congress won only six seats (it had five last
time) and some wins were due to booth capturing and bogus voting, he
alleged. At Rave, there was firing too after complaints of booth
capturing. This is also the constituency of Maharashtra Minister of
State for Public Works Ravishet Patil of the Congress. Desperate to show
solidarity, his son Vaikunth, a newly elected zilla parishad member,
took part in the rasta roko last week.

Unlike other members of his party, Shrikant Patil from Vashi in Pen
taluka of Raigad district is one of the few Congressmen to have won the
Zilla Parishad elections and caused an upset of sorts in his area.

This former sarpanch of Vashi village has been opposing the SEZ. ``I too
am a small farmer with four acres and I am strongly opposed to the SEZ,"
he said.

His opponent Anant Patil, who heads the committee of 24 villages opposed
to the SEZ from Pen taluka, said overall, the Sena -PWP did benefit from
the anti SEZ sentiments and he lost only by a few votes.

Youth leaders of the party such as Dhairyashail Patil, PWP district
secretary, said unless the SEZ issue was fought in the political arena,
the people would not win. The anti-SEZ feelings were reflected in the
elections but not to the desired extent, he pointed out. He said the
anti-SEZ sentiment was very strong in the Hamrapur area but the party
lost from there. However, the Congress is probably feeling the heat from
the protests as last Friday, during the rasta roko, Chief Minister
Vilasrao Deshmukh made statements in the Upper House that the Government
would not come in between the farmers and the Government in land
acquisition issues. However, the people are demanding that land
acquisition notices be withdrawn.

Official sources said land acquisition proceedings were not stalled and
the hearings were still underway.

http://www.hindu.com/2007/03/28/stories/2007032800911400.htm

We will develop SEZ in our own way: Chidambaram

2007-03-29T22:05:00.001-07:00

Posted online: Friday, March 30, 2007 at 0000 hours IST

SHENZHEN (CHINA), MAR 29 : Amid controversies over the setting up of
China-style Special Economic Zones (SEZ), India on Thursday said the
government recognised SEZs as an important tool in furthering
industrialisation but will implement the concept in its "own way".
"We recognise that SEZs are a useful tool for industrial development,
especially in areas where infrastructure is lacking. Where
infrastructure already exist, it is perhaps not necessary to create
SEZs," India's finance minister P Chidambaram said after inaugurating
the first full-fledged branch of Bank of India here.

The one-time fishing village of Shenzhen is the first the SEZ in China.
It was China's first major experiment with capitalism after late Chinese
paramount leader Deng Xiaoping landmark visit to the southern Guangdong
province in 1986. The Shenzhen SEZ was originally established in 1979
due to its proximity to Hong Kong, then a prosperous British colony. The
SEZ was created to be an experimental ground of capitalism in "socialism
with Chinese characteristics".

Chidambaram noted that Chinese businesses were already routing 300
million US dollars worth of business through BOI in countries like
Singapore and expressed confidence that with the establishment of a
full-fledged bank in Shenzhen, Chinese businesses would opt to deal with
Indian banks for their requirements in India.

Indian ambassador to China, Nirupama Rao noted that BOI is the only
Indian bank to have two offices in China -- Shenzhen and in Beijing,
where it has a Representative Office. Pointing out that India will soon
open a second Consulate General in Guangzhou, capital of the southern
Guangdong Province, she hoped that cities like Shenzhen would play a
greater role in fostering stronger bilateral trade between India and China.

BOI chairman andMD M Balachandran said it was a privilege for the bank
to commence operations in Shenzhen and contribute to enhanced bilateral
trade and economic cooperation.

http://www.financialexpress.com/fe_full_story.php?content_id=159459

Industry seeks SEZ-like tax sops for steel

2007-03-29T10:51:00.001-07:00

DATELINE

NEW DELHI, MAR 27: Industry body CII has sought higher banking exposure
norms for lending to steel projects and infrastructure status to the
steel industry, besides tax sops on par with special economic zones to
boost the sector.
"The government should consider steel industry as a priority industry
and provide appropriate fiscal incentives which are provided to other
priority sector industries," CII said in a paper submitted to the
government.

The industry body demanded enhancing sectoral exposure limits of banks
and financial institutions from 10 and 15 % to 25 %, besides
infrastructure status to the steel industry similar to power sector.

It also suggested setting up a Special Purpose Vehicle -Steel Finance
Corporation of India (SFCI) as a public-private partnership entity for
the sector. CII suggested that integrated steel plants with a capacity
of minimum two million tonnes be allowed to determine their own rate of
depreciation while duty on project imports for greenfield and brownfield
expansions for steel projects be brought down to zero in the next 15
years.The chamber sought relaxations on restrictions for end use of
External Commercial Borrowings for steel firms to enable them retire
rupee debt and raise project finance.

"Interest limit on raising ECBs may be relaxed to at least LIBOR plus
5.5 on floating rate from the current rate of LIBOR 5.5 per annum," CII
suggested in the paper.

The industry body also demanded that securitisation of export
receivables be made free from all restrictions.

"Main EPC contractor for setting up steel plant should get benefits
available to a developer as provided in the SEZ Act," the industry body
demanded strongly.

http://www.financialexpress.com/fe_archive_full_story.php?content_id=159228

Essar now eyes multi-product SEZ at Hazira

2007-03-29T10:39:00.003-07:00

HARIT MEHTA

TIMES NEWS NETWORK[ MONDAY, MARCH 26, 2007 12:35:48 AM]

AHMEDABAD: After steel and subsequently engineering, the Essar group now
plans to convert its upcoming special economic zone (SEZ) at Hazira into
a multi-product SEZ. The group has recently filed an application with
the state government and has started the process of acquiring additional
land for the project. This means the group will have two multi-product
SEZs in Gujarat.

Originally, the group had planned to set up a steel SEZ at Hazira.
Subsequently, it sought permission to convert it into an engineering
SEZ. The engineering SEZ, which was likely to come up on 267 hectares,
has been cleared by the Board of Approvals.

Essar SEZ Hazira had signed an agreement with the state government
during the recently concluded Vibrant Gujarat Global Investors' Summit
to develop a steel plant and a deep-water port and allied facilities at
Surat. The company pledged total investments of Rs 12,750 crore.

State government sources said the company wants to further convert it
into a multi-product SEZ. "Essar now wants to develop a multi-product
SEZ instead of an engineering zone," said a senior state department
official. When contacted the company declined to comment.The group has
already got a BOA approval for its multi-product SEZ at Jamnagar, which
will come up over 1,000 hectares. The Hazira SEZ will be almost as big
in terms of area as its Jamnagar multi-product SEZ.

The company proposes to augment its steel manufacturing capacity to nine
million tonnes at Hazira. Sources say the company is talking to
automobile major Nissan and component manufacturer Manineto for setting
up facilities in the Hazira SEZ.

Besides, the group has also got the approval for power SEZ at Suvali in
Surat. The group also plans to expand its cargo handling capacity at
Hazira to 35 million tonnes in order to cater to the increased
requirement of industry.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Essar_now_eyes_multi-product_SEZ_at_Hazira/articleshow/1807071.cms