The Union government on April 18 announced a 'package of reforms', including easing of land requirement norms and an exit policy, to rekindle investor interest in Special Economic Zones (SEZs). Union Commerce and Industry Minister Anand Sharma said the SEZ scheme has not been able to realise its full potential so far.
The government has undertaken a comprehensive review of the SEZ Policy. The package of reforms will revive investor interest in SEZs, he added. SEZ, once a major attraction for investors, lost the sheen following imposition of MAT and DDT, certain provisions in the proposed direct tax regime (DTC) besides the global slowdown.
Announcing the supplementary foreign trade policy (FTP), Sharma said the government has taken note of the fact that there are acute difficulties in aggregating large tracts of uncultivable land which is vacant to set up SEZ. The government has decided to reduce the Minimum Land Area Requirement by half for different categories of SEZs, he said.
Sharma said that for multi--product SEZ, minimum land requirement has been brought down from 1,000 hectares to 500 hectares and for Sector-Specific SEZs, it has been brought down to 50 hectares. Also, there would be no minimum land requirement for setting up IT\ITES SEZs, besides easing of minimum built up area criteria.
The Minister said the government has received feedback from SEZ units that suggested they are placed at a severe disadvantage in absence of exit policy.