No plans to amend SEZ Act: Govt

Despite mounting pressure from the Left allies, government on Wednesday made it clear that it has no plans to amend the Special Economic Zone Act saying it is 'working well'.

Replying to supplementaries to a host of questions on SEZs in Rajya Sabha, Commerce and Industry Minister Kamal Nath said special economic zones have become important engines of economic growth.

"At the moment, there is no proposal to amend the SEZ Act. It has worked well, it is working well. It is providing growth in employment and is one of the important engines of economy," he said.

The minister's reply triggered angry reactions from Left, BJP and some Congress members, who claimed that SEZs have become real estate business as norms are being violated and sought a special discussion on the matter.

Amid the din, Nath said the government will look into specific instances of 'misuse or abuse' of the Act if pointed out, but that assurance did not cool down the tempers after which Chairman Hamid Ansari had to intervene.

The chairman agreed to allow a special discussion on the matter as demanded by CPI-M leader Sitaram Yechury and asked members to inform the minister about specific cases of violation of SEZ norms.

Several members claimed that cinema halls and amusement parks are coming up in SEZs in violation of norms and in the pretext of setting up such zones land is being grabbed. 

"SEZ Act is passed by the House and it is not a policy. If there is misuse or abuse, we will be very happy to look into it if specific cases are pointed out," Nath said responding to the concerns of members.

Nath said the Economic Survey of the government has dispelled concerns

raised about SEZs and shown that there is "very, very substantial gain".

Senior BJP leader Venkaiah Naidu sought to know whether the government was ready to convene a meeting of all political parties to discuss what he described as a 'burning issue'.

Nath said the government has not conducted any study or assessed the impact of the recent economic slowdown on exports from SEZs and noted that it was too early to conclude whether the global slowdown would affected Indian exports.

On reviewing the viability of SEZs in the present economic climate, he said as the newly established SEZs have just begun operations, it is too early to make any assessment on their viability.

He said exports from SEZs was of Rs 34,615 crore (Rs 346.15 billion) in the last fiscal, up from Rs 22,840 crore (Rs 228.4 billion) in 2005-06 and Rs 18,314 crore (Rs 183.14 billion) in 2004-05. There is a growth of 89 per cent in two years, he added.

In the current fiscal, exports have reached the level of Rs 40,000 crore (Rs 400 billion), he said.

Giving more details, Nath said under the SEZ Act, 2005, 439 formal approvals have been granted for setting up special economic zones spreading over 60,168 hectares in 22 states out of which 202 have been notified.

Till last year, the total incremental employment in all the SEZs is 1.46 lakh, he said.

The minister said new generation SEZs have brought in investment worth Rs 70,225 crore (Rs 702.25 billion) out of which Rs 67,347 crore (Rs 673.47 billion) have been made in SEZs notified under the SEZ Act, 2005.

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