Faced with uncertain market conditions and growing opposition to land acquisition, 20 more promoters have sought more time from the government for implementing their projects, taking the number of developers seeking extension to over 200.
Another four promoters have approached the Commerce Ministry for surrendering their formal approvals, citing global economic uncertainty as the reason. The Commerce Ministry, on January 14, will consider these proposals, including that of Tata Consultancy Services and Parsvnath SEZ for extension of time.
Special economic zone (SEZ) developers, including Medicaps IT Park Pvt. Ltd. have approached the Board of Approval (BoA) to surrender their projects, a Ministry official said. According to experts, uncertainty over tax exemptions to new SEZs has also led to declining interest in the tax-free enclaves. Investors are apprehensive about the new draft Direct Taxes Code (DTC).
According to the revised DTC draft, which will replace the Income-tax Act, 1961, tax exemptions for SEZs will be confined to the existing units. The developers, who have sought more time to implement their projects, include Mahindra World City (Jaipur) Ltd. for its sector specific zone, Genpact Infrastructure (Jaipur) and Tata Consultancy Services for their IT/ITeS zone in Rajasthan and Andhra Pradesh, respectively.
Parsvnath SEZ Ltd. has sought more time to develop its sector specific SEZ for Biotech in Andhra Pradesh. As much as 184 SEZ developers have been given additional time to execute their projects.
The BoA would also consider two new proposals of Mahindra World City (Jaipur) to set up a gems and jewellery SEZ and IT/ITeS tax-free zone in Rajasthan. SEZs have emerged as major sources of attracting investments and increasing exports.
So far 580 SEZs have been formally approved, of which 114 are in operation. The SEZs contributed 35 per cent to the country's exports in 2009-10. Exports from these zones stood at Rs.1.40 lakh crore during April- September 2010-11 against Rs.89,750 crore in the same period last fiscal. Shipments from SEZs increased from Rs.22,840 crore in 2005-06 to Rs.2,20,711 crore in 2009-10.
