Ministry plans draft to amend SEZ Act
The Commerce Ministry plans to come out with draft guidelines to amend the Special Economic Zones (SEZ) Act, 2005. The draft guidelines would be put out on its Web site for public discussion within the next two to three weeks, said Dr Rahul Khullar, Commerce Secretary.
With land emerging as a major constraint for huge industrial projects in the wake of widespread protests by farmers for land acquisition across the country, the Commerce Ministry has been mulling over a “relook” at the area ceiling for multi-purpose SEZs. The area ceiling for multi-purpose SEZs is at 5,000 hectares at present.
“There needs to be a change in the Act, rules and policies followed in SEZs. Moreover, the minimum land requirement will also be relooked at, as land is a major issue in many states,” Dr Khullar said, while speaking at an open house meet organised by FIEO and EPC for EOUs and SEZs here today.
Food price inflation was likely to moderate over the next six months; however, cost push inflation would linger on for sometime, he opined. Talking about the high interest rate regime, he said, “We are almost at the peak of the interest rate cycle and unless something disastrous happens we should see it (interest rates) decline over the next one year.”
There would be a ‘fair amount' of volatility in exchange rates for the next three to six months, he pointed out. Exporters should, therefore, hedge their exposures and should not take unnecessary risks in exchange rates.
Amidst concerns over erratic movement of dollar and other foreign currencies, there was no threat for Indian exports, he said. “While it may not have a whopping 40-50 per cent growth this year, there is nothing to worry about as exports have been growing consistently at around 30 per cent for the last eight months,” he said.
The Commerce Ministry would also talk to the Finance Ministry to ease out the availability of export finance at internationally competitive rates. “When there is huge exchange rate volatility, there is reluctance to make advances in foreign currency denomination,” he said.