CAG audit finds serious losses due to SEZ lapses
22 Oct 2014 5:54 AM IST
In a soon to be tabled report in the winter session of Parliament on the Performance Audit (PA) on Special Economic Zones (INDT), CAG has observed that nearly 36 SEZ units across the country had been achieving the prescribed (positive) National Foreign Exchange (NFE) mainly through domestic sales.
While an overall export of about Rs 12,000 crore was made by these 36 units, the actual export content was about Rs 2,500 crore and the remaining Rs 9,500 crore related to Domestic Tariff Area (DTA) earnings. During the audit it was found that the revenue implication of these units has reportedly caused a loss of nearly about Rs 436 crore in the last three years.
The audit agency has also expressed dismay over the non utilization of SEZ land by several private players in Kerala, West Bengal, Gujarat, Tamil Nadu and Andhra Pradesh. Sources said, more than 60,000 hectares of SEZ land is yet to be utilised.
Former commerce and industry minister Anand Sharma had, in an internal meeting, expressed concern over the large gap between notified and operational SEZs but unfortunately nothing has been done so far to take action against the developers.
‘We have observed that a large number of companies have not started their operations and not even given warning to start operations. It is a fact that some of them are on the verge of losing land as the government is planning to go ahead with the de-notification. But it is not enough,’ informed sources said.
As per rules, those who were given land for SEZ have to start operations within three years but the practice was not followed in many parts of the country. It was learnt that the Ministry of Commerce and Industry in a reply to CAG has said they are in the process of collating data for each SEZ and after that they will do the evaluation separately to decide the future course of action.
It was also found that some SEZs could not start operation due to environmental clearance issues and the national auditor has suggested the Ministry of Environment to expedite the process for better revenue generation.
SEZ scheme was introduced on 1 April, 2000, with an objective to trigger a large flow of foreign and domestic investment leading to generation of additional economic activity and creation of employment opportunities.
While an overall export of about Rs 12,000 crore was made by these 36 units, the actual export content was about Rs 2,500 crore and the remaining Rs 9,500 crore related to Domestic Tariff Area (DTA) earnings. During the audit it was found that the revenue implication of these units has reportedly caused a loss of nearly about Rs 436 crore in the last three years.
The audit agency has also expressed dismay over the non utilization of SEZ land by several private players in Kerala, West Bengal, Gujarat, Tamil Nadu and Andhra Pradesh. Sources said, more than 60,000 hectares of SEZ land is yet to be utilised.
Former commerce and industry minister Anand Sharma had, in an internal meeting, expressed concern over the large gap between notified and operational SEZs but unfortunately nothing has been done so far to take action against the developers.
‘We have observed that a large number of companies have not started their operations and not even given warning to start operations. It is a fact that some of them are on the verge of losing land as the government is planning to go ahead with the de-notification. But it is not enough,’ informed sources said.
As per rules, those who were given land for SEZ have to start operations within three years but the practice was not followed in many parts of the country. It was learnt that the Ministry of Commerce and Industry in a reply to CAG has said they are in the process of collating data for each SEZ and after that they will do the evaluation separately to decide the future course of action.
It was also found that some SEZs could not start operation due to environmental clearance issues and the national auditor has suggested the Ministry of Environment to expedite the process for better revenue generation.
SEZ scheme was introduced on 1 April, 2000, with an objective to trigger a large flow of foreign and domestic investment leading to generation of additional economic activity and creation of employment opportunities.
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