Odisha SEZ policy clears finance dept hurdle

The policy is crucial since many big industrial investors like Tata Steel and Vedanta were awaiting it for availing the incentives

Odisha’s Special Economic Zone (SEZ) policy has moved a step forward with the finance department giving its consent to incentives offered in the draft policy statement.

The finalisation of the state specific SEZ policy is crucial since many big industrial investors like Tata Steel and Vedanta were awaiting it to avail the incentives.

“After the go-ahead from the finance department, the draft policy would now move to other relevant departments like revenue & disaster management, energy, water resources and forest & environment. After receiving suggestions/objections from these departments, we will give a final shape to the pending policy,” said a source at industries department.

Though the policy was framed in 2010, it failed to move forward since the finance department was initially opposed to doling out tax sops and incentives in line with the prevailing SEZ policy of the Government of India.

The policy is aimed at attracting investors in non-metallurgical sectors as a bulk of the big ticket investments proposed in the state were in core metallurgical sectors like steel and aluminium.

As per the draft 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.

Gujarat was the first state to formulate a state specific SEZ policy in 2002 and enacted a legislation to this effect in 2004. Besides Gujarat, Jharkhand, Uttar Pradesh, Karnataka, Punjab, Kerala, West Bengal, Maharashtra and Madhya Pradesh have formulated SEZ policies.

Odisha’s SEZ policy aims to widen the state's 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.

Under the proposed 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, ilmenite, nickel, platinum and vanadium will be allowed.

Moreover, the state would not encourage SEZs based on activities like mining that cause pollution. The state pollution control board was to prepare a list of such industries and the same would be notified by the state government as a negative list.