Priscilla Jebaraj

They should be allotted 40 per cent of land: official

CHENNAI: Small-scale exporters can soon be an essential part of the mega Special Economic Zone boom.

The Union Ministry of Micro, Small and Medium Enterprises has requested the Ministry of Commerce and Industry to keep aside space for small and medium enterprises in SEZs, according to Chandra Pal, Secretary, Union Ministry of Micro, Small and Medium Enterprises.

“We have requested the Commerce and Industry Ministry that at least 40 per cent of plots and lands [in SEZs] be allotted to micro, small and medium enterprises,” Dr. Pal told The Hindu during a recent visit to Chennai.

Talks under way

He said a dialogue was under way between the ministries to work out the modalities. “Of course, all SEZ developers are looking for their profits, but we think this is important,” he said.

Dr. Chandra Pal said another option would be to treat small and medium enterprise export clusters on a par with SEZs. “They should be given the same tax advantages.”

In fact, SEZ developers may welcome the small players — with certain conditions. According to J.K. Subrahmanian, southern region executive director of DLF Group, a leading SEZ developer with several projects in Tamil Nadu, small and medium enterprises would have to be given sufficient incentives, possibly concessions in property prices, to locate themselves in the large SEZs far away from cities.

“We are quite OK if the government makes a package [of incentives] hand in hand with land allotment,” he said. It was important that the small units should not be from polluting industries.

However, Mr. Subrahmanian differed with Dr. Chandra Pal on how much land should be set aside for the small and medium units, saying 5-10 per cent of an SEZ’s total land was a reasonable percentage.

Alternatively, he suggested that each of the 8-10 large anchor companies in an SEZ be allowed 20-40 acres for their own auxiliaries, the SMEs who make up their supply chain. “That would make the anchors responsible for bringing in SMEs.”

Help for relocation

Small exporters in Tamil Nadu would welcome the chance to get in on the SEZ action.

“If the government could provide assistance for relocation, many SMEs would be interested,” said D.P. Ravichandran, an SME exporter and managing director of Eurocon Tiles.

It would be even better if SEZ developers would agree to share revenue with SMEs. He felt that one-third of the space on an SEZ could reasonably be reserved for small exporters.

“The biggest advantage would be if the SEZ formalities for import and export would be more transparent and hassle-free…That is what takes up all our time now,” he said.