101 SEZs de-notified in last 12 years: Govt

In the past 12 years, the government has approved de-notification of 101 special economic zones. Private developers had requested de-notification due to poor market response, lack of demand for SEZ space and change in fiscal incentives.

Between April 2008 and February 2020, the Board of Approval (BoA) on SEZs approved 101 cases of denotification, government data showed.

However, the de-notification was subject to the developers refunding all duties and tax benefits availed of by them and state government issuing ‘no objection’ certificates.

After the enactment of SEZ Act, 2005, many private developers had approached the government seeking approval to set up SEZs. Prior to 2005, there were only 7 central government SEZs and 12 state/private sector SEZs. After 2005, 421 proposals received formal approval. At present, 354 SEZs are notified, out of which 240 SEZs are operational.

The government had constituted a committee to study SEZ policy in 2018. It has implemented some of the recommendations of the committee, which include relaxing the mandatory usage requirement that stipulated that the de-notified land shall be used for SEZ purpose only. All existing and future SEZs were allowed to be multi-sector SEZs. Services that enable manufacturing like R&D services, design and logistics services could be part of the SEZs. The minimum land area requirement for setting up a multi-sector SEZ also was relaxed from 500 hectares to 50 hectares.

The period to construct minimum built-up area was extended beyond 10 years. The SEZ approval also can be transferred from one co-developer to another co-developer.

According to government, it has also taken a few measures to enable ease of doing business at SEZs. Now, the Development Commissioner has the authority to shift a unit from one SEZ to another. Setting up of cafeteria, gymnasium, creche and other similar amenities were allowed in SEZ units. Work from Home policy also has been revised for SEZ.