JAITLEY WANTS SPEEDIER IMPLEMENTATION OF SEZsPARLIAMENTARY CONSULTATIVE COMMITTEE OF COMMERCE AND INDUSTRY MEETS
Date : 12 Mar 2003
Location : New Delhi
Shri Arun Jaitley, Union Minister of Commerce & Industry and Law & Justice, today underlined the need for speedier implementation of Special Economic Zones (SEZs) and said that "the process of getting the Zones ready should not have roadblocks". He was speaking at the Parliamentary Consultative Committee attached to his Ministry here this morning. The agenda for discussion was "SEZs – Experience of other countries and the state of our SEZs". While calling for a faster roadmap for SEZs, Shri Jaitley also highlighted the role that such Zones supported by central initiatives could play in exploiting the export potential in identified growth sectors. Shri Rajeev Pratap Rudy and Shri Vidyasagar Rao, Ministers of State for Commerce & Industry; Shri Dipak Chatterjee, Commerce Secretary and other senior officers were present.
Members who participated in the meeting – S/Shri Kapil Sibal, P. C. Thomas, M. Master Mathan, Prakash V Patil, B. Venkateshwarlu, Rajkumar Dhoot and Ms. Prema Cariappa – were unanimous in welcoming the concept of SEZs, which they felt good give a real boost to the country’s exports and made several suggestions for effective implementation of the scheme. Shri Sibal said that for SEZs to succeed they must be totally decentralised as was the case in China. He also cautioned against having multiplicity of SEZ Acts by states which would have no uniformity and could undermine the autonomy of the Zones. He further suggested that the Commerce & Industry Minister should call a meeting of Chief Ministers on SEZs to explain the benefits that would flow to the states by setting up these Zones and to get their inputs so as to have a faster roadmap for SEZs.
In a presentation before the Committee, status of SEZs in India and the policy packages announced so far were highlighted. The SEZ scheme, which was launched in April 2000 and aims to provide an internationally competitive duty-free environment for export production supported by world-class infrastructure, has received a good response from State Government/private promoters and so far 17 new SEZs have been approved – Positra (Gujarat); Indore (Madhya Pradesh); Navi-Mumbai (Maharashtra); Nangunery (Tamil Nadu); Visakhapatnam (Andhra Pradesh); Gopalpur (Orissa); Hassan (Karnataka); Kulpi (West Bengal); Salt Lake (Kolkata); Bhadohi (Uttar Pradesh); Kanpur (Uttar Pradesh); Grater Noida (Uttar Pradesh); Moradabad (Uttar Pradesh); Paradeep (Orissa); Vallarpadam/Puthuvypeen (Kerala); Kakinada (Andhra Pradesh); and Khopta (Maha Mumbai – Maharashtra). Governments of Andhra Pradesh, Maharashtra, Madhya Pradesh, Gujarat and Karnataka have already announced their policy on SEZs, while Uttar Pradesh has enacted its SEZ Act. In addition, 8 existing Export Processing Zones (EPZs) located in Kandla & Surat (Gujarat), Cochin (Keala), Santa Cruz (Mumbai-Maharashtra), Falta (West Bengal), Madras (Tamil Nadu), Visakhapatnam (Andhra Pradesh) and Noida (Uttar Pradesh) have been converted into SEZs.
Shri Jaitley indicated that he would take up with the Finance Ministry certain pending issues concerning SEZs and also speed up the roadmap for future through various means such as enactment of the Central SEZ Act; addressing infrastructure needs; follow-up with the state governments etc. The revenue-related pending issues include operationalisation of provisions of the Customs Act relating to SEZs approved in the 2002-03 budget; exemption from Central Sales Tax; duty-free material for setting up of SEZs and exemption from service tax to developers of units.
Members appreciated the initiatives taken by the government to address the problems of the plantation sector, especially the setting up of Rs. 500 crore Price Stabilisation Fund. They noted that there had been recovery in tea prices as a result of these efforts. Members also urged the government to resolve the DEPB problems which were affecting exports of marine products. There was also a suggestion aggressive export promotion of plantation items in order to ensure remunerative prices for growers.
Highlighting the importance of SEZs, a background note circulated at the meeting states: "The effectiveness of SEZs in generating export production is already well established by the performance of such Zones world-wide. Exports in the year 2000 from these Zones were US $ 850 billion, representing 15% of the total world export. The Zones are also increasingly being perceived as a major source of attracting FDI. The need for SEZs as vehicles for production for exports and increased FDI have been highlighted in the report of McKinsey (2001) on ‘Achieving a quantum leap in India’s FDI’. The Report recommends that ‘over the next 5 years India could attract FDI of over US $ 11 billion in the exports sector. Major action required for doing so is the creation of SEZs offering world class infrastructure and other facilities’".