SEZ glitter drives India Inc crazy

NEW DELHI: The government’s plan to impose a cap on the number of special economic zones (SEZs) has led to a mad scramble by India Inc to get on to the SEZ bandwagon. Corporate biggies like the Chatterjee Group, Suzlon, Genpact, Vedanta Alumina, Ansals and Enfield are jostling with scores of smaller companies to obtain approval from the government to set up SEZs. The commerce & industry ministry has been inundated with applications from companies seeking to set up SEZs, highly-placed government sources said.

The Board of Approval (BoA), the panel that clears SEZ applications, is meeting on Tuesday to consider India Inc’s plans for setting up dozens of SEZs more. While TCG Refineries of the Chatterjee Group has sought permission for an SEZ refinery at Haldia in West Bengal, Suzlon Infrastructure wants to set up hi-tech engineering products and services SEZs near Coimbatore in Tamil Nadu, Udupi in Karnataka and Vadodara in Gujarat. Hindalco has sought permission for an aluminium SEZ at Sambalpur in Orissa, while Genpact has sought clearance for three IT SEZs — at Bhubaneshwar in Orissa, Jaipur in Rajasthan and Bhopal in Madhya Pradesh.

Vedanta Alumina has sought permission for an aluminium SEZ at Orissa, while Moja Shoes, the first to obtain clearance for foreign direct investment (FDI), under the single brand retail category, has applied for a footwear SEZ at Nellore in Andhra Pradesh. SRF has sought permission for a multi-product SEZ at Visakhapatnam in Andhra Pradesh, while International Panacea has sought permission for a biotech SEZ in Delhi. Seeking the BoA’s permission for SEZs are also a number of real estate players, including DLF, Ansals, Omaxe, Parsvnath, Shipra Estate and Sunny Vista Realtors.

Since virtually all segments of India Inc want a piece of the SEZ pie, the deluge of applications is likely to mount pressure on the government to relax the proposed cap of 150 on the total number of SEZs. The list of companies that have filed for SEZs reads like the who’s who of the big and famous as well as the small and ambitious.

The chief ministers of Haryana and Andhra Pradesh have already made a strong case for scrapping the ceiling. Commerce department officials told ET that the BoA will take up 167 applications, including approved cases, deferred cases and new applications. “We are receiving several new applications every day. It is becoming difficult to cope with so many of them,” an official said.

Due to the ceiling of 150 — imposed by the empowered group of ministers on SEZs — the BoA is faced with the challenge of using its discretion. In order to ensure even distribution of SEZs, the government wants to give preference to states that have not received SEZ plans so far.

“We have decided to give preference to applications from states like Orissa, Uttaranchal and Goa,” the official said. Preference will also be given to sectors which have not received attention from SEZ developers so far. Lists of under-represented states and sectors have been prepared for this purpose.

The proposals to be considered by the BoA on Tuesday include 49 deferred proposals, 13 new non-IT proposals, 42 new IT cases and 16 applications for multi-product SEZs. The BoA will also consider 39 cases for in-principle approval in the under-represented category, a multi-product SEZ by Gujarat Adani, one electronics SEZ each by Flextronics and Chandigarh Administration and an IT SEZ by Tata Consultancy.