Govt to relax SEZ land norms soon

With the aim of checking the slack pace of growth in special economic zones (SEZs), the government is expected to announce relaxed land-related norms for these tax-free zones by making certain amendments to the SEZ policy.

The major amendment will be a change in minimum land requirement across the sectors by reducing the threshold limit for each sector-specific SEZ in the wake of severe constraints faced by developers in acquiring huge tracts of contiguous land, official sources said.

At present, the minimum land required for a multi-product SEZ is 1,000 hectares (ha), while for an information technology (IT) zone it is 100 ha and for gem and jewellery 10 ha. But the problem arises while acquiring land for these SEZs. In order to resolve the problem, the government now plans to reduce the minimum requirement of land for multi-product SEZs to 250 ha. For SEZs such as IT, gem and jewellery and biotech, the threshold would be 10 ha.

Expansion, relocation and single-window clearance are the other areas where these tax-free enclaves face problems, which could hit exports.

Another area of concern is the contiguity norms. Many projects have been held up for several years because of this. The government is likely to amend the policy in such a way that the contiguity norms would be applied only to the processing area where actual manufacturing and export take place, and not to the non-processing areas that are to house residential colonies, hospitals and schools, sources said.

Moreover, for IT SEZs, ring fencing would be made mandatory, with more entry and exit gates guarded by security personnel to check those areas where contiguity is broken due to the presence of some physical barrier such as railway lines, water bodies or highways, among others.

Source : Exim News Service - New Delhi, June 21