Bharat Forge to convert Chakan SEZ into industrial area
Pune firm to become first company to take advantage of Maharashtra government’s new industrial policy
Mumbai: Pune-based Bharat Forge Ltd proposes to convert its Chakan special economic zone (SEZ) into an integrated industrial area and become the first company to take advantage of the Maharashtra government’s new industrial policy, which allows developers to exit projects to build Chinese-style industrial enclaves
Chairman and managing director Baba Kalyani made the proposal in Pune on Thursday at the company’s annual general meeting (AGM). When contacted for comment on Friday, Kalyani said:“I have nothing more to add."
In a new industrial policy unveiled in January, the Maharashtra government offered developers an exit route from SEZs by allowing them to use 60% of the land in their possession for industrial purposes, 30% for commercial (including residential) developments and 10% to build social infrastructure like schools, hospitals, roads, water and sewage treatment plants.
Developers have lost interest in building SEZs after coming up against hurdles such as delays in land acquisition and changes in tax laws such as the imposition of a minimum alternate tax and dividend distribution tax on units located in SEZs.
“Due to delays in land acquisition, change in tax laws by the central government, coupled with the overall economic slowdown, SEZ developers are no longer interested in developing them and around 9,500ha of land acquired for SEZ remains idle," state industry minister Narayan Rane said. “We must ensure it is put into use for economic development of the state."
In 2006, Bharat Forge said it would set up a 4,500ha multi-product SEZ at Rajgurunagar in Pune district, close to the automobile hub of Chakan. In 2009, the company and the state government’s industrial infrastructure arm, Maharashtra Industrial Development Corporation (MIDC), formed a joint venture to set up the SEZ but they could acquire only 1,700ha of land.
In the recently-concluded monsoon session, the state legislature passed an amendment to the Maharashtra Industrial Development Act, allowing use of land acquired for industrial purposes for other purposes too.
“Bharat Forge has already moved an application for denotification of the SEZ with the board of approval," said a senior official in the industry ministry. “After the SEZ is denotified, Bharat Forge will have to move a detailed proposal and seek approval before it can start activity on the ground." The board of approval scrutinises SEZ-related project proposals.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!