Modi team to review, resolve stalled SEZs' problems

PM says SEZs key in improving exports, states must set up export promotion councils

The government had set up a high-level team to review and resolve the problems that special economic zones, a large number of which are stalled, faced, Prime Minister Narendra Modi said here on Saturday. Modi, who was on a day-long tour of Maharashtra, was speaking at a ceremony to lay the foundation stone of the proposed Rs 4,000-crore Jawaharlal Nehru Port Trust Special Economic Zone (SEZ), at Sheva in Navi Mumbai.

The prime minister said SEZs would play a key role in improving the country’s exports and added his administration was committed to boosting exports from India.

Speaking at the function earlier, Maharashtra Chief Minister Prithviraj Chavan highlighted that 23 of the 146 SEZ applicants in the state had abandoned their plans due to lack of clarity on taxation, especially on the dividend distribution tax. Modi grabbed the opportunity to ask Chavan why he was unable to pursue the matter with the previous Congress-led United Progressive Alliance regime.

SEZs, built on the lines of China’s gigantic export zones, enjoy certain tax benefits. But very few such projects were able to take off in India. These zones are among the $134 billion worth of projects held up in the country over delay in land acquisition and lack of government/ environmental clearances. Agitation by local people against land acquisition is another big problem faced by the SEZs. In fact, one of the biggest SEZs planned by Reliance Industries in Navi Mumbai met with strong opposition from local inhabitants, who were not happy with the compensation package offered and alleged land grabbing by the company. The project never took off.

Stressing extra focus needed to be given to increasing the country’s exports, Modi asked states to compete with one another to ensure faster growth in this area. “We, at the Centre, have to team up with state governments for export promotion and states should also work hard individually to drive exports,” he said. Separate export promotion councils should be set up by state governments to drive foreign trade at the local level and not rely solely on the Central government’s interventions, he said.

At present, the commerce & industry ministry plays the facilitator’s role for the exports. “We want to create a distinct identity for India in the global market; this is possible, given our strengths,” he said.

The prime minister said his government had conceived Sagarmala, an ambitious project for maritime states. This would envisage not merely port development but port-led development — ports & SEZs; and rail, road, air & waterway connectivity with the hinterland through linkage of cold storages and warehousing facilities, etc.

Modi started the day with the launch of INS Kolkata, a made-in-India warship, and reiterated India would encourage local shipbuilding, instead of importing defence equipment. On his government’s decision to allow 49 per cent foreign direct investment in defence, Modi said: “We have to import (military hardware)... Because of this decision, India can become self-reliant in this sector. Our youth will become innovative and a day will come when India will export in this sector.”

Most foreign companies say they will invest in the sector and transfer technology only when they get majority share in joint ventures, or at least a 50 per cent stake in local companies. Modi inaugurated the Raichur-Solapur transmission line and said the dream of his government was to provide electricity to every village in the country. He also used the occasion to ask consumers to conserve electricity.