SEZ - the heat is on – ICICI Bank to be cautious
Was the Prime Minister referring to the SEZs when he talked about headline grabbing MOUs and race to the bottom? With Revenue fearing a loss of 1,75,000 Crores from SEZs and Commerce ministry hoping that SEZs will generate 44,000 Crores every year, with Punjab farmers whose land costs a Crore an acre afraid of losing their fertile land for SEZs, with RBI wanting banks to treat SEZ on par with real estate, there is high drama and banks are not too keen to invest in SEZs. At least one banker – the biggest of them all ICICI said so. “The bank would wait for the present uncertainty to settle down and for greater clarity to emerge,” said KV Kamath, CEO of ICICI Bank. JP Morgan Stanley had done a study on the SEZs and reported that
++ There was Overwhelming Response to New SEZ Law
++ It is a Right Concept….
++ ……But Not-so-right in Execution
++ Most SEZ Applications Are Driven by Tax Benefits
++ Size is Very Small to Get the Scale-related Advantages
++ Labour Environment Will Still be an Issue
++ Private Sector May Not Take Up Development of the
++ Large SEZs Needs
++Some Policy Makers Opposing the SEZ Law - The Ministry of Finance (MOF) has been vocal in opposing the government’s liberal approach towards the setting up of SEZs
++ Undertaking Large SEZ Regions is the Real Solution
In the mean time, the Board of Approval headed by the DGFT GK Pillai who has been appointed the Commerce Secretary has yesterday given formal approval to 18 new SEZs and in principle approval for 13 more. The in principle approvals granted include the proposal from M/s Posco India Private Limited for setting up of a Multi product SEZ in Jagatsinghpur District, Orissa with an area of 1601.6 hectares. The investment would be of the order of over Rs.53,000crores. The total number of formal approvalsfor establishment of SEZs till date comes to 181. 32 SEZs are already notified. They are
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