Government to weed out non-serious SEZ players: CNBC
14 Nov 2006
After
a free for all, the government is putting in place regulations
to weed out "non-serious SEZ players." The developers
will have to complete land acquisitions within a set time
frame failing which they could lose their in-principle
approval, reports CNBC-TV18.
From making it easy for setting up SEZs, the government is now swinging to the other extreme. It wants to put in place specific time frames for corporates to complete their land acquisitions in order to get a license to start an SEZ.
The commerce ministry has suggested that developers be given specific time frames to finish land acquisitions after which their in-principle approval would lapse. Currently, developers have up to a year to finish their land acquisitions, which the Board of Approvals can extend on a case-by-case basis.
But under the new proposal, IT SEZs, which have a minimum land requirement of 10 hectares, would have six months to complete their acquisitions, while sector-specific SEZs would get a year and multi-product SEZs, such as those being set up by Reliance Industries would have a year and half to finish land acquisitions.
Moreover,
since multi product SEZs would require at least 10,000
acres of land, the commerce ministry has also proposed
giving them a further extension of a year to complete
their acquisitions.
But as usual, there isn't a consensus between the commerce
and finance ministries on the issue. The department of
revenue, in turn, has suggested even stricter time frames.
For sector-specific SEZs it wants land acquisitions to
be completed in six months and for multi-product SEZs
in 12 months.
More than half the in principal approvals given to SEZs are for IT SEZs. While this move might seem to be a face saving exercise to placate the Left and farmers, given the challenges of acquiring land, government sources say that this would weed out non-serious players.
But
as recently seen, land acquisitions is not just time consuming
but also a politically sensitive issue. And to expect
companies to acquire
the SEZ land in three months, without any governmentt
support, might just prove to be a Herculean task for corporate
India.
