Govt relaxes norms for setting up SEZ in small towns

In a significant move to spread out industrialisation and decongest big cities like Mumbai and Chennai, the government has drastically reduced the minimum built-up area requirement for the Special Economic Zones (SEZs) in small towns.

In the new rules notified for the SEZs, the mandatory built-up processing area has been halved for 15 cities, including Raipur, Varanasi, Jabalpur, Amritsar, Nashik, Dhanbad and Madurai.

For SEZs in smaller towns, the built-up area requirement has been further cut to one-fourth the norm in the nine big cities.

In the nine big cities, a multi-product SEZ requires minimum 500 hectares of built up area but the requirement has been cut to 250 hectares for small cities and further reduced to 125 hectares in smaller towns, as per the new rules.

"The amended SEZ rules will encourage developers and units to go to semi-urban and rural areas so that the people of those regions could get job opportunities at their doorstep," Export Promotion Council for EoUs and SEZs Director General L B Singhal said.

However, the Commerce Ministry has tightened the rules to weed out non-serious players by making it mandatory for developers to operationalise the SEZ within three years of getting an approval.

"The letter of approval of a developer...Shall be valid for a period of three years within which time at least one unit should have commenced production," one of the amended rules said.

Out of the 580 SEZs approved, only 111 have been operationalised in the last four years.