SEZ rush down to a trickle with EGoM lifting cap

NEW DELHI: The rush among corporates to set up Special Economic Zones in the country has virtually come to a halt with the government's decision last month to lift the cap of 150 SEZs.

The Board of Approval for SEZs has recieved only 2-3 new proposals since the Empowered Group of Ministers' decision to remove the limit of 150 on August 23, a senior Commerce Ministry official said.

This is in contrast to the earlier trend, where the BoA recieved more than 300 proposals since the enactment of the SEZ Act in February this year, the official said.

The rush among companies was primarily because nobody wanted to be left out before the limit of 150 was reached, he said, adding the companies now felt assured that they would also be able to set up such zones.

The BoA has already approved 150 SEZs and still has about 225 proposals. The Board is likely to meet later this month to consider these pending applications, the official said.

Of the 150 zones approved so far, 22 SEZs including Reliance's petroleum and petrochemical SEZ in Gujarat, Adani's multi-product SEZ in Gujarat, IT major Wipro's three SEZs in Andhra Pradesh and Karnataka and Biocon's SEZ in Karnataka have been notified.

The official said these 22 zones are expected to become functional within 6-12 months, while most of the 150 zones would begin operations by December 2007.

The SEZs are expected to attract investment of up to Rs 100,000 crore, a quarter of which would be Foreign Direct Investment. The Commerce Ministry is also of the view that the number of jobs created by the SEZs would be to the tune of 500,000 by December 2007, he said.