New Delhi: Investors are losing trust on Special Economic Zones (SEZ) in the country so much so that a lot of its proposals are being annulled by the government.
Due to strict norms of SEZs and Minimum Alternate Tax (MAT) on its units, the investors are not showing much interest in the development of these zones.
57 companies involved in the development of SEZs have nowapplied to the government to withdraw their proposals. The government is expected to analyze the same in the coming week ahead of budget 2015 disclosure.
Sources from Ministry of Commerce and Industry have revealed that a meeting of Board of Approval (BOA) has been called upon on forthcoming 20th February in order to take discretionary steps related to these proposals initiated for development. The meeting will be convened in the presence of chief secretary Rajiv Kher and a decision will be taken related to them.
Out of all, JSW Aluminium and Pasharvnath are two companies which have initiated requests to withdraw their proposals.
35 of the total SEZs are tax-free and are related to Information Technology and Communication and Information Technology. Rest of the proposals are related to Engineering, Biotechnology, gems and jewelry, pharmaceuticals and textile industry.
Sources have also revealed that it is declared in the agenda note of BOA that commerce ministry will have to take the official call in all these cases. Since, most of the developers related to these SEZs have not started any work on them hence the concerned departments have decided to cancel their proposals.
Pasharvnath proposed to establish an SEZ based on IT and ITES in Indore, Madhya Pradesh which was notified in 2007. As per the agenda papers, there is no work in this SEZ till now which ministry is thinking to be an outcome of slowdown of economy.
The company has told the government that as of now it is not even intending to work in the concerned area seeing which the development officer has recommended the ministry to annul its SEZ.
Before this, around 50 other developers have also applied to withdraw their proposals.
Reportedly, the current government is interested to change rules of these areas and is even permitting development in the non-productive units. However, till the time government does not implement its new SEZ policy, it is not possible to draw the attention of the investors.
