SEZs may not be able to throw out units easily

NEW DELHI: Units investing in special economic zones (SEZ) are in for some good news. The government will soon notify changes in SEZ rules, making it difficult for SEZ developers to ask units to move out if they fail to pay rent for a period or don’t meet other requirements. The developers will have to necessarily obtain permission of the development commissioner of the zone before taking the harsh measure.

SEZ rules will also be amended suitably to bring it in line with the budgetary decision of allowing SEZ units to use second hand capital goods up to 20% of their total requirement.

Speaking to ET, officials in the commerce department said that the notification on SEZ rules would also include fixing the ceiling on SEZs at 5,000 hectares and increasing the processing area for multi-product SEZs to 50% of the total area.

“The government felt that it would not be a good idea to let SEZ developers unilaterally decide whether a SEZ unit should be asked to move out. Since the problem ailing the unit could be small and something which could be taken care of, it was decided that the development commissioner should have the final word on it,” the official said.

The commerce department also wants to change the SEZ rules to align it with the budgetary decision of allowing units to use second hand capital goods up to 20% of the total capital goods used by them. Last year, a rule was introduced banning SEZ units from using second-hand capital goods. However, it was later felt that the requirement was too harsh on SEZs and units should be allowed to use some second had machinery.

The government keeps tweaking the SEZ rules from time to time to make provisions for addressing fresh demands and concerns from both the industry and policy makers.