New Delhi: Setting a precedence, the commerce ministry’s board of approval (BoA) on special economic zones (SEZs) on Friday granted an extension of an in-principle approval to Orion Infrastructure Pvt. Ltd even though the developer approached the board 20 days after the expiry of the validity period.
Orion proposes to build an SEZ for information technology firms at Bandhwari near Gurgaon, Haryana. The developer has submitted that it has acquired the entire 130 ha of land for the project. It had obtained the approval in 2006.
Slowdown factor: Commerce secretary Rahul Khullar.Harikrishna Katragadda / Mint
An SEZ is an enclave aimed at increasing investment and exports. Companies based in SEZs are eligible for tax and other incentives.
According to SEZ rules, 2006, an in-principle approval is valid for one year and an extension of validity could be granted for another two years. A second extension could be granted for a sector-specific SEZ if the developer is in possession of 60% of the required land.
“This is the first such instance. Even if the rules do not permit extension after the validity period expires, the board has exercised its power and waived off the rule in this particular case,” a consultant with an audit firm said on condition of anonymity. He, however, said that the board is unlikely to make this a normal practice.
Among other proposals, the board agreed to denotify an information technology SEZ in Navi Mumbai by realty firm K Raheja Universal Pvt. Ltd and allowed the passage of metro rail through the Cyber City SEZ in Gurgaon being developed by DLF Cyber City Developers Ltd. In its previous meeting, the board had agreed to de-notify four zones of real estate firm DLF Ltd, with the rider that the company would repay all tax benefits it availed of in developing the SEZs.
The board ratified extension of time to 23 developers, including Satyam Computer Services Ltd in the wake of economic slowdown for building these enclaves. The government has so far granted 576 approvals to set up SEZs, out of which 319 have been notified. The Friday meeting, chaired by commerce secretary Rahul Khullar, informed the board that Rs1.09 billion have been invested in the SEZs and direct employment of 387,439 persons has been generated. Exports in SEZs registered around 50% growth in rupee terms in 2008-09, amounting to Rs99,689 crore.