The Commerce Ministry on Friday proposed revamp of the SEZ policy to address issues concerning land acquisition and boost exports with a view to bridge the widening trade deficit.
In a draft discussion paper, the Ministry said that special economic zones (SEZs) could act as a potent instrument to increase the country’s shipments and attract more foreign direct investment (FDI).
“Given this scenario there is no option for India other than promoting enhanced exports and FDI growth. Given the very encouraging performance over the last five years, the SEZ programme is a promising instrument for achieving both these objectives,” it said.
Proposing to review all land-related aspects of the SEZ policy, the discussion paper said that land availability for SEZs has become a constraint accentuated by fairly onerous requirements of minimum size, contiguity, predominantly non-double cropped land and non-compulsory acquisition.
The Land Acquisition Act would possibly make the process of meeting land requirement even more challenging, it added.
“These factors call for a review of all land-related aspects of the SEZ policy so as to assess their underlying rationale and reasonableness,” it said.
The paper said that there is a need to review aspects, like minimum area criteria for SEZs, vacancy and contiguity norms and processing/non-processing zone stipulations.
It further pointed out that in the present context, the companies are facing considerable difficulty in acquiring 1,000 hectare of contiguous land.
The paper proposed that the minimum area requirement for multi-product SEZ may be reduced to 250 hectares from the present 1,000 hectares.
Similarly, for multi-services and sector-specific tax-free enclaves, it proposed to reduce the minimum land area to 40 hectares from 100 hectares each.
During the April-October period, India’s trade deficit touched $ 93.7 billion, up from $ 72 billion in the corresponding period last fiscal. Exports from SEZs in 2010-11 stood at Rs 3.15 lakh crore, an increase of 43 per cent over the same period last year.