SEZ law amendment, allowing trusts to set up units, passed by Parliament

[] An amendment to the SEZ law, allowing trusts to set up units in special economic zones, has been approved by Parliament, with the government asserting that these zones are an engine of growth and employment

The Rajya Sabha, on June 27, 2019, gave its nod by a voice vote, to the Special Economic Zones (Amendment) Bill, 2019, a day after the Lok Sabha passed it. The Bill will replace the Special Economic Zones (Amendment) Ordinance, 2019, which was promulgated in March. The ordinance had paved the way for trusts to set up units in these zones.

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Replying to the debate on the Bill, commerce and industry minister Piyush Goyal said “This is a small amendment that has a large impact on investment, jobs and growth. Until now, we have eight proposals from such trusts. Total investment proposed by these trusts comes out to be Rs 8,000 crores,” Goyal said, adding that the government expects about USD 3 billion, which is around Rs 20,000 crores investments annually.

The previous government had withdrawn exemptions in income tax, dividend distribution tax and MAT and because of it, the SEZ framework faced some stress, he said, adding that it left several investors in lurch. “At the end of March 2019, the investment in SEZs was a whopping Rs 5 lakh crores plus and the employment was over 20 lakhs in SEZs and export from SEZs was over Rs 7 lakh crores,” he said. The minister said no one can deny the role of such SEZs being ‘an engine of growth and engine of creating jobs’.

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Participating in the debate, D Raja of CPI, sought to corner the government about the tearing hurry to bring the ordinance on SEZs. “We have serious apprehensions on this Bill,” Raja said and urged the minister to address these concerns. Opposing the bill, TKS Elangovan of the DMK also questioned the urgency to pass the ordinance, saying it was an ‘insult’ to Parliament. AAP member Sanjay Singh wanted to know whether the government had any policies, to return unutilised land to farmers and to provide employment to local people in SEZs. TMC leader Derek O’Brien said his party grossly opposed SEZs, as this business model had not worked in India. P Bhattacharya (Congress) said barren land should be used for SEZs and not agricultural land.

Swait Malik of the BJP supported the bill, saying it would boost economic growth and foreign investments. Naresh Gujral of Akali Dal supported the bill, saying the country needed FDI but he asked the government to have consistent policies to give confidence to investors. Globally, Gujral said, trusts were a very common route for making investments and cited the example of Real Estate Investment Trusts (REITs). Supporting the bill, Ram Gopal Yadav (SP) asked about government scrutiny of the trust which invest in SEZs. Earlier, moving the Bill, Goyal said there is a need to introduce the legislation to assure international markets that investments can be made through Trust mechanism into special economic zones in India.

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Category: Lifestyle

Debora Berti

Università degli Studi di Firenze, IT

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