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| 9 new SEZ proposals despite slowdown |
| Press Trust Of India / New Delhi Jan 05, 2009, 00:30 IST |
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The government has received nine fresh proposals for setting up special economic zones (SEZs) despite the industry losing appetite for investment in the tax-free enclaves on lack of business confidence in these difficult times.
The Board of Approval (BoA) in the commerce ministry will consider new proposals, including those of infrastructure major Larsen & Toubro (L&T) and JSW Group on January 15. L&T, which has already received approval for three SEZs, proposes to set up another zone for information technology (IT) and information technology enabled services (ITeS) in Maharashtra, sources said.
The BoA, chaired by Commerce Secretary GK Pillai, will also take up proposal from steel giant JSW Group for setting up an SEZ for aluminium in Andhra Pradesh. The group already has two approvals in its pocket for such projects. While the West Bengal project would be for steel products, it would be a port-based venture in Maharashtra.
SEZs, which remained the favourite investment destinations for the last three years, started losing sheen towards the fag end of 2008 as promoters, especially those in the real estate business, found few takers for the units in these enclaves.
Investors’ frenzy has given way to withdrawal symptoms, though well over 270 tax-free zones have been notified by the government. Several realty players, which saw a great opportunity in the SEZs, have developed cold feet on these investments.
DLF has officially approached the commerce ministry for denotification of one of its IT SEZs to be located at a prime land in the national capital.
In terms of sectors, the IT and ITeS dominated the approvals and notifications. Of the total zones notified, 163 related to IT and ITeS. While the sector has remained in the forefront of India’s growth story, the main reason for IT and ITeS firms rushing towards the SEZs was tax incentives.
The Software Technology Park scheme, under which IT companies get sops is nearing the sunset clause despite getting extension.
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