Press Information Bureau
Government of India
Ministry of Commerce & Industry

03-August-2011 18:01 IST

Performance of SEZ

             Land is a State subject. Land for SEZs is procured as per the policy and procedures of the respective State Governments.  As per information available in respect of 381 SEZs, 82.3% of land is waste/barren/dry/industrial, 15% of land is single crop and 2.7% of land is double crop. A Statement containing state-wise distribution of land area of SEZs is Annexed. 

The main objectives of the SEZ Scheme are:

a)      generation of additional economic activity

b)      promotion of exports of goods and services

c)      promotion of investment from domestic and foreign sources

d)      creation of employment opportunities

e)      development of infrastructure facilities

The SEZs are under obligation to achieve positive Net Foreign Exchange (NFE) earnings to be calculated cumulatively for a period of 5 years from the commencement of production, failing which the units shall be liable for penal action under the provisions of the Foreign Trade (Development and Regulation) Act, 1992.  However no export targets are set for Special Economic Zones (SEZs).

As on 30th June, 2011, an investment of Rs. 2,12,914 crore approximately has been made in SEZs and the total direct employment in SEZs is 7,14,412 persons.  The total exports made by SEZs during the last three years have been given below:-

 

Fiscal benefits and duty concession are allowed to the SEZ Developers and units as per the provisions of SEZ Act 2005. However, Finance Minister in his budget speech on 28th February, 2011, has imposed Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) on SEZ Developers and Units.   

Studies commissioned by  the Department of Commerce have shown that SEZs have created a significant local area impact in terms of direct as well as indirect employment, emergence of new activities, changes in consumption pattern and social life, human development facilities such as education, healthcare etc. 

In addition to seven Central Government Special Economic Zones (SEZs) and 12 State/Private Sector SEZs set up prior to the enactment of SEZ Act, 2005, formal approval has been accorded to 585 proposals out of which 381 SEZs have been notified.  A total of 143 SEZs have commenced export. 

In terms of Rule 6 of the SEZ Rules, validity of approval is for a period of three years within which time effective steps are to be taken by the developer to implement the approved proposal. On a request received from the developer, the Board of Approval, for the reasons to be recorded in writing can extend the validity period.  Setting up of Single Window Clearance Mechanism, fiscal benefits and duty concessions, simplification of rules and procedures are some of the steps taken for speedy operationalisation of SEZs. 

 

# This also includes the land already in the possession of Government agencies including State Industrial Development Authorities.

 

 

This information was given by the Minister of State in the Ministry of Commerce and Industry, Shri Jyotiraditya M. Scindia, in a written reply in the Rajya Sabha today.

 

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DS

Net Foreign Exchange obligation for SEZ units requires cumulative positive earnings or penal action under foreign trade law. SEZ developers and units receive fiscal benefits under the SEZ Act, 2005 but must meet a statutory Net Foreign Exchange (NFE) obligation-positive cumulative NFE over five years from production start-or face penal action under the Foreign Trade (Development and Regulation) Act, 1992. The budget imposed Minimum Alternate Tax and Dividend Distribution Tax on SEZ entities. Administrative rules provide three year approval validity under Rule 6, subject to Board recorded extensions, with approvals, notifications and state wise land allocations tracked to monitor investment, exports and employment impact.