The Hindu : Tamil Nadu News : Pondicherry gearing up to establish special economic zones

Online edition of India's National Newspaper
Friday, Nov 26, 2004

Tamil Nadu

Tamil Nadu

Pondicherry gearing up to establish special economic zones

By Rajesh Nair

PONDICHERRY, NOV. 25. Now that the Centre has agreed in principle to creation of two special economic zones (SEZs) at Karasur in Pondicherry, the territorial administration is considering floating a Special-Purpose Vehicle (SPV).

Of the two zones, one is for the automobile and auto parts sector and the other for bioinformatics, services and hardware under the Information Technology (IT) sector.

Details sought

The Centre has sought specific details on the proposed third zone for the machinery and equipment sector, a highly placed official told The Hindu .

"We are considering floating the SPV to look after the development of the SEZ. Also, we are looking for private investors for infrastructure development. If no private player comes forward, the Government itself will take up the work."

Land acquisition

For the SEZs, the Government needed 875 acres of land. A major part of the land identified at Karasur was in private hands and acquisition would be speeded up. Three hundred acres each would be allotted to the automobile-auto parts and machinery-equipment zones. Another 275 acres would go for the IT zone, he said.

To start with, it was proposed to develop a 65-acre government land available at Karasur.

`Most competitive'

The Pondicherry SEZs would be the most competitive among all zones in the country, the official said. The Government intended doubling Pondicherry's export to Rs. 1,000 crores.

Tax concessions

A Department of Industrial Development (Industries and Commerce) notification said developers of SEZs and industrial units and other establishments there would be exempted from sales tax, value-added tax, purchase tax, turnover tax and any other levy for all transactions made among the units within the zones.

However, sales tax and VAT as and when introduced would be levied on goods manufactured in the SEZs and sold locally.

The developers and units within the zones would be exempted from taxes levied by local bodies, as they were self-contained units responsible for the maintenance of services.

The Government would grant a transport subsidy on inland freight (inward and outward). It would reimburse the full fare or the fare fixed by the zone, whichever is less.

An independent power supplier would be permitted to set up a unit in the zone.

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