India on Tuesday approved 26 proposals to set up special economic zones (SEZs) which enjoy tax concessions for exports, including those of Reliance Industries Ltd. and Wipro Ltd. project, a senior official said.
Reliance plans to come up with a multi-services SEZ spread over 440 hectares of land in Gurgaon near New Delhi, while Wipro is to come up with a project for information technology services in Hyderabad, Commerce Secretary G. K. Pillai said.
Nine other proposals got in-principle approval, including one multi-product port-based zone at Rewas in Maharashtra state that is being co-promoted by Reliance Industries, he said.
The Commerce Ministry decision comes after a two-month freeze on approving SEZs, which have attracted protests from threatened farmers and landowners. Inspired by similar zones established in China, the tax-free enclaves are seen as a way to promote trade.
Proposals for another nine SEZs were approved pending scrutiny by state government departments, while a further 13 applications were deferred.
Overall, Manmohan Singhs government has given approval for 111 SEZs in the past two years. India believes that the zones will help provide employment and secure large amounts of foreign investment.
The initiative has inspired huge interest among would-be developers but has also prompted resistance from rural communities in India, where farming is the mainstay of some two-thirds of the population.
After SEZs for industry, New Delhi is now looking to set up huge new “food parks” to modernize Indias traditional agriculture. The federal government has drafted an integrated food law designed to promote investment in agriculture and food processing that would include the proposed food parks. The plan is to provide bases for investment in Indian agriculture.
At present, only 2 percent of Indias food production is processed (forarbejdet), leading to extensive waste and distress sales by farmers. According to Minister for Food Processing Industries Subodh Kant Sahai, Indias 70 billion US dollar food sector is “completely tax-less”.
Sahai said the government was looking to work out the means to set up an initial 56 food parks of between 10 ha and 100 ha in size. Thirty locations have already been identified for the parks, which will be notably smaller than the tax-free SEZs, which can be up to 5.000 ha.
Sahai said with an estimated potential of 40 billion dollar investment, the food-processing industry is the next “hot” sector in India after information technology.
Kilde: www.worldbank.org
