Maharashtra may scrap policy allowing conversion of failed SEZs into integrated industrial areas

Cites Centre's move to revive SEZs with adjustments in MAT & DDT as the reason

The BJP government in Maharashtra proposes to scrap the Congress-NCP government's policy allowing conversion of failed special economic zones (SEZs) into integrated industrial areas (IIAs). The trigger is Centre's move to revive SEZs with adjustments in minimum alternate tax (MAT) and dividend distribution tax (DDT) and thereby attract investments to boost exports. The government is contemplating giving necessary policy push for the revival of SEZ after the Centre releases new Foreign Trrade Policy.

The previous government in its industrial policy announced in January 2013 and the subsequent amendment to the Maharashtra Industrial Development Act, 1961 had proposed conversion of SEZs, which could not take off, into IIAs. However, it was made mandatory for the promoter to use 60% land for industrial use, 30% for residential and 10% for commercial purposes. The new policy envisaged more land available for industry. While SEZs had 50% minimum land requirement for industry earlier, the policy had proposed it at 60% for IIAs. However, it was attacked by various political parties terming it a pro-builders' one.

"The IIA policy has failed miserably as there was just one proposal received to the state-run Maharashtra Industrial Development Corporation from a promoter SEZ for its conversion into IIA in Pune district. However, the project did not take off. Furthermore, other SEZ promoters also ADOPTED wait and watch policy in the run up to the Lok Sabha and state assembly polls. Now with the Central government's plan to give a push for the revival of SEZs, Congress-NCP government's policy has become infructuous and  therefore it will be scrapped," a senior industrial department official told Business Standard. He further informed that the formal decision in his regard will be taken soon by the chief minister Devendra Fadnavis led government.

Newly appointed state industries minister Prakash Mehta said the government will provide all the necessary help for the revival of SEZs.

According to the industries department data for 2012-13, there were 124 approved, 64 notified and only 24 executed SEZs in the state. The operational SEZs created over 850,000 jobs. The operational SEZs accounted for investment of Rs 10,836 crores.