Centre’s guidelines on SEZ to affect TS

A half of the Special Economic Zones (SEZ) in the state could lose their status if the Centre’s new guidelines on SEZ operations come into force.

The Centre appointed the Singhal committee to review the functioning of SEZs as in many cases thousands of acres of land is lying vacant and there were other anomalies in the way these zones functioned. The committee was headed by Noida SEZ development commissioner L.B. Singhal.

The committee submitted its 39-page report in the last week of December 2017.

The committee has recommended cancellation of SEZ status if operations have not begun within three years of getting all approvals.

The norms for renewal of SEZ status have also been tightened. There should be at least one operational unit in a SEZ to seek renewal.

Telangana is among the states with the most number of SEZs — 64 — but only 30 are operational at present.

The other 34 SEZs are nonoperational but continue to hold SEZ status by seeking renewal of approval every three years. This will no longer be possible if the recommendations of the committee are accepted.

The committee also recommended that national security clearance must be obtained from the Union home ministry to set up a SEZ, in order to deter foreign nationals/firms with dubious credentials from setting up units in SEZs, taking advantage of the liberalised rules for SEZs. Currently, approval is required only from the Union ministry of commerce.

SEZs apply for renewal just a few days ahead of the Board of Approval (BOA) meeting but the committee has recommended that applications for renewal be made at least two months prior to the BoA meeting, incorporating all the details and reasons for seeking renewal.

Moreover, all units functioning from SEZs must be registered for GST (Goods & Services Tax).

The committee has further suggested that the inter-ministerial BoA be accorded powers to grant exemption, relaxation or relief to units and developers from certain rules to promote these zones.

The Centre has invited states to give their suggestions/feedback on the committee’s recommendations.