The Andhra Pradesh government is planning to issue ordinance promulgating the state Special Economic Zone (SEZ) Act shortly. | |
| It is expected to finalise the draft in a couple of days once the ongoing consultations between the departments concerned and at the chief minister level are over. |
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| The government is in a hurry to bring in the legislation on SEZs as the public sector ONGC, which has announced to set up an export-oriented refinery plant and a port-based SEZ project at the port town of Kakinada, wants to get the ball rolling without any delay. |
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| The need for SEZ legislation has become imminent as the government is also in the process of firming up plans with regard to the development of Andhra Pradesh SEZ (APSEZ) project at Visakhapatnam, for which 7,000 acres of land has already been acquired. |
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| Besides, a huge cluster of textile and garment companies from Sri Lanka is planning to set up base in Visakhapatnam for which the state government has assured to provide SEZ status apart from offering 1,000 acre land. |
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| According to government sources, the state government is planning to bring in the ordinance mostly along the lines of the model SEZ Act passed by the Parliament this year. As for the changes in labour laws applicable to SEZs, the government is expected to maintain a status quo. |
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| The government is said to be wary of any negative reaction, especially from the Left on allowing any kind of 'hire and fire' provision to the employers who set up units in SEZs. |
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| The Hero Honda episode involving a brutal lathicharge on striking workers at Gurgaon seems to have dampened the government's enthusiasm to bring flexibility in labour laws, even though in a limited way. |
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| Till recently, the state industry department considered changes in labour laws, tailor-made to SEZs, a key precondition to get investments as well as to beat the competition from other states, which are equally vying for any big project coming to India. |
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| "Foreign investors, especially MNCs will look for a hassle-free environment in terms of legal problems. This does not mean that they do not want to pay minimum wages or contribute to employees provident fund. In fact, the salaries in those companies are much higher when compared to local job market. Yet, in the given situation the state government finds it difficult to think of effecting any changes that bring flexibility to companies in hiring workers," a senior government official told Business Standard. |
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| As for the SEZ Act, besides offering several tax incentives, it enables the government to appoint a development commissioner for each SEZ who will be empowered to deal with all issues including securing clearances for the development of SEZ. |
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| With investments proposed for the Rs 5,500-crore export-oriented refinery project already approved by the Union Cabinet, ONGC is eager to see the state legislation put in place for taking further steps, sources said. |
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| It may be recalled that ONGC, along with its subsidiary Mangalore Refinery and Petrochemicals Limited (MRPL), will be holding 46 per cent equity in the Kakinada Refinery project. |
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