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Special Economic Zones thrown open to private sector in U.P.

Atiq Khan

Special Economic Zone Policy, 2006 offers several incentives to private promoters

LUCKNOW: Development of Special Economic Zones (SEZs) has been thrown open to the private sector in Uttar Pradesh. This marks a qualitative shift from the earlier policy of the State Government promoting SEZs, as was the case in the Mayawati regime which had taken several steps for setting up SEZs in Kanpur and Bhadohi (Sant Ravidas Nagar district).

Even the UP Special Economic Zone Act, 2002, was formulated by the Mayawati Government for giving legal sanction to the SEZs.

However, the Uttar Pradesh Special Economic Zone Policy, 2006, which was granted approval by the State Cabinet, not only offers several incentives to private promoters and investors, it has virtually abandoned the earlier proposal of setting up SEZs at Kanpur and Bhadohi. As Industrial Development Commissioner Atul Kumar Gupta said, "there were several limitations in the old system. Foremost was the undue delay caused in the tender process. The new policy which lays emphasis on private sector's involvement has been formulated to cut unnecessary delays."

The Industrial Development Commissioner said an analysis conducted by consultants Ernst and Young, in nine States found that only one bid had been approved in Maharashtra, but the process had consumed almost three years.

In fact, the UP Government had drawn inspiration from the success of the SEZ in Shanghai, China. "For making the products of the SEZs globally competitive and for providing world class infrastructure facilities it was imperative to have the best companies investing their money in the proposed SEZs," said Mr. Gupta.

The State SEZ policy had been finalised in the light of the Union Government's proposal to set up around 150 special economic zones in the country. Four SEZs proposals from UP have been formally approved by the Union Government while 10 proposals have been given provisional approval. The four SEZs are at Moradabad (which is functional), Noida (being developed by the Union Government) and two others to be promoted by Wipro and HCL, also in Noida.

The State SEZ Policy, 2006,offers two-way incentives and exemptions to promoters and investors in the form of selection of the developer and availability of land, and fiscal concessions. The development of SEZs has been divided into three regional categories. Category A includes Noida and Greater Noida. Category B means SEZs being developed within the jurisdiction of the development authorities. Included in Category C were other areas. While the nodal agencies for developing SEZs in categories A and B were Noida and Greater Noida, and the development authorities respectively, the UP State Industrial Development Corporation (UPSIDC) has been designated as the nodal agency for Category C.

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