RBI told to push core status for SEZs

NEW DELHI: The Union government is pressing the Reserve Bank of India (RBI) to reclassify special economic zones (SEZs) and give them infrastructure status so that the duty-free enclaves get easier access to credit and loans at cheaper rates than other sectors.

The commerce department has written to RBI urging quick action to operationalise the changed status, which was decided on by a ministerial panel nearly a month ago.

���We have underlined the need to take urgent action to implement the decision as SEZ activities are being adversely affected due to credit shortage,��� a commerce department official told ET.

The panel decided in October to classify SEZ activities as being part of the infrastructure sector instead of the real estate sector in which it had been grouped.

A notification by RBI formalising the change will allow SEZs access to a special fund for the infrastructure sector. They will also get loans from the fund at a 2% cheaper rate from the prime lending rate (PLR). PLR is the rate of interest at which banks lend to their favoured customers.

The official said the implementation of approved SEZ projects had slowed because of unavailability of credit. Developers have been complaining that they do not have access to bank credit any more and even SEZs which have been notified are not starting operations, the official added.

As many as 531 SEZ projects have been formally approved, of which less than half have been notified and 143 projects given in-principle approval. ���Our focus is now on ensuring that the projects that have approval get implemented,��� the official said.