New state-specific SEZ policy on the anvil

In a bid to widen its investment horizon and attract more investors in sectors like information technology, biotechnology, electronics, automobiles and auto component manufacturing, ship building, gems and jewellery and pharmaceuticals, the Orissa government has drawn up a plan to come out with a state specific Special Economic Zone (SEZ) Policy.

"Orissa has witnessed a rush of investment proposals for setting up of mineral based industries. Now, we intend to diversify our industrial base and have more of the investments in sectors like electronics, automobiles, biotechnology and ship building and to incentivise investors in these sectors, the state has decided to come out with its SEZ policy”, an official source told Business Standard.

A high-level meeting chaired by the state Chief Secretary B K Pattnaik was held on Friday to finalize the SEZ Policy.

Under the proposed SEZ Policy, the state government shall not encourage SEZs based on mining and minerals like iron ore, chrome ore and bauxite. However, SEZs based on the use of intermediate products like alumina for smelting, primary metals for further processing on the value chain and rare minerals like tin, limenite, nickel, platinum and vanadium will be allowed.

Moreover, the state shall not encourage SEZs based on activities like mining that cause pollution. The Orissa State Pollution Control Board shall prepare a list of such industries and the same would be notified by the state government as a negative list.

The mineral based SEZs already approved shall undertake to develop and promote related downstream industrial complexes over a minimum area as prescribed by the Government of India. In the event of non-compliance of this condition, all state concessions shall be withdrawn.

The State Level Single Window Clearance Authority (SLSWCA) shall be the competent authority to screen and recommend SEZ proposals irrespective of the magnitude of investment.

All recommendations of SLSWCA would be placed before the High Level Clearance Authority for approval before making any recommendation to the Government of India.

The state government owned Industrial Promotion and Investment Corporation of Orissa Limited (Ipicol) would function as the state level nodal agency for receipt, scrutiny and placement of the applications before the SLSWCA.

For sector specific projects, the respective nodal agencies like the Orissa Computer Application Centre (OCAC), Industrial Infrastructure Corporation of Orissa Limited (Idco) and Agricultural Promotion and Investment Corporation of Orissa Limited (Apicol) will receive and scrutinize the applications.

As per the SEZ Policy of the state, the import of goods and services made to SEZ units located within the processing zone from the Domestic Tariff Area shall be exempted from Value Added Tax (VAT), entry tax, electricity duty and other cess payable on sales and transactions.

The SEZ Policy of the state has not envisaged any special provisions for backward districts like Kalahandi, Bolangir and Koraput and tribal dominated areas.

Till now, four SEZs have been notified in the state- the sector specific IT/ITes SEZ at Chandaka Industrial Estate in Bhubaneswar developed by Idco, sector specific SEZ for stainless steel and ancillary downstream industries at the Kalinga Nagar Industrial Complex being developed by JSL, aluminium and aluminium products SEZ at Lapanga near Sambalpur being developed by Hindalco Industries and another aluminium SEZ with Captive Power Plant being developed by Vedanta Aluminium Limited at Jharsuguda.