Ruling out any relief from imposition of Minimum Alternate Tax (MAT), the Commerce and Industry Minister, Anand Sharma, on Thursday, announced a set of reforms for Special Economic Zones (SEZ), including relaxation of land requirement norms, introduction of graded scale for minimum land criteria, offering an exit policy and doing away with minimum land requirement for setting up an IT/ITeS SEZs.

The package of reforms and changed norms come in the wake of disinterest shown by corporate India to set up new SEZs. Also, they come at a time when existing players are either seeking to exit their projects or trying to scale them down. “The SEZ scheme has not been able to realise its full potential so far. We have undertaken a comprehensive review of the SEZ Policy, ” Mr. Sharma said while unveiling the new Foreign Trade Policy (FTP) for 2013-14.

Mr. Sharma said the government had taken note “of the fact that there are acute difficulties in aggregating large tracts of uncultivable land which is vacant’’ to set up SEZ.

“We have decided to reduce the Minimum Land Area Requirement by half for different categories of SEZs. For multi-product SEZ, minimum land requirement has been brought down from 1,000 hectares to 500 hectares, and for sector-specific SEZs, it has been brought down to 50 hectares,” he said.


He said that there would be no minimum land requirement for setting up IT\ITeS SEZs. The minimum built-up area criteria, too, was eased. Mr. Sharma said it had now been decided to allow transfer of ownership of SEZ units, including sale.

The 170 functional SEZs — export-oriented enclaves — have attracted investment of over Rs.2.36 lakh crore, and exports from them totalled Rs.4.76 lakh crore in 2012-13, a growth of over 2,000 per cent over the seven-year period. The minimum built-up area requirement had been considerably relaxed at one lakh sq. m.for Mumbai, Delhi (NCR), Chennai, Hyderabad, Bangalore, Pune and Kolkata.

For class B-cities, minimum built-up area would be 50,000 sq. m.

For other cities, 25,000 sq. m. built-up area norm would be applicable. To provide greater flexibility in utilising land tracts falling between 50 hectares and 450 hectares, it had been decided to introduce ‘graded scale’ for minimum land criteria which would permit a SEZ an additional sector for each contiguous 50 hectare parcel of land.

He said flexibility to set up additional units in a sector-specific SEZ had been provided by introducing ‘sectoral broad-banding’ to encompass similar or related areas under the same sector.

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