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SEZ applications after 5 April put on hold as backlog mounts

SEZ applications after 5 April put on hold as backlog mounts
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First Published: Sun, Apr 15 2007. 09 46 AM IST
Updated: Sun, Apr 15 2007. 09 46 AM IST
New delhi: The government has informally put a freeze on new proposals for setting up Special Economic Zones (SEZs) that were submitted after 5 April.
The empowered group of ministers (eGoM), which has been mandated by the government to take decisions on SEZs, had last met on that day. Decisions of the eGoM do not have to be approved by the cabinet.
The commerce ministry, the nodal agency for the administration of the SEZ policy, continues to receive new proposals for SEZs but will not process them since the ministry already has 369 proposals pending with it as on 5 April.
Even if the Board of Approval, the inter-ministerial body for approving the zones, holds two meetings a month and considers around 40 proposals in each meeting, the new cases can be processed only after eight months, said an official familiar with the move.
If the pending proposals are clubbed with 162 cases that have received in-principle approvals and 234 zones that have either been notified or have received formal approval, they add up to 765 SEZs, said a senior ministry official who did not wish to be identified.
The commerce ministry had, on its own, proposed to cap the SEZs before the eGoM meeting. The ministry has also suggested that the government should not accept any more cases after 5 April.
The ministry is hoping that the eGoM will, in its next meeting, take a view on how many SEZs should be allowed to come up in the country.
“There is a likelihood that the eGoM may consider putting a freeze on more information technology SEZs since a majority of the zones which have been approved are IT zones,” the official said.
Officials said that the Board will also take a tough stance while reviewing the status of zones that have already been given in-principle approvals.
“The in-principle approval has a validity of one year. Several of these approvals will be up for review in June-July. If we find that a zone has not been able to acquire the land or process forward, the approval will be allowed to lapse,” the official said, adding that there was a possibility that of the 162 in-principle approvals, just around 100 would finally get formal approvals.
Since the last meeting of the eGoM, which lifted the freeze on SEZs, the government has notified 26 zones and the total number is expected to touch 90 by the end of the week.
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First Published: Sun, Apr 15 2007. 09 46 AM IST