Lok Sabha Question No. 228 (STARRED), answered on 2016-03-14
Subject: Exports from SEZs
Ministry: COMMERCE AND INDUSTRY
Asked by: NAGENDRA KUMAR PRADHAN, FAGGAN SINGH KULASTE

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA STARRED QUESTION NO. 228 TO BE ANSWERED ON 14 TH  MARCH, 2016

## EXPORTS FROM SEZS

## *228. SHRI NAGENDRA KUMAR PRADHAN: SHRI FAGGAN SINGH KULASTE:

Will  the  Minister  of COMMERCE & INDUSTRY ( वािणÏय एवं उɮयोग मंत्री ) be pleased to state:

- (a) whether the exports from the Special Economic Zones (SEZs) have declined during the last  three  years  and  the  current  year  and  if  so,  the  details  thereof  and  the  reasons therefor along with the steps taken to boost exports from SEZs;
- (b) whether the Export Promotion Council for Export Oriented Units and SEZs have shown their concern over failure to resolve the issues and if so, the details thereof;
- (c) whether the imposition of Minimum Alternate Tax/Dividend Distribution Tax on SEZs has dented  the investor friendly  image  of  SEZs  and  has  affected  the  growth, investments,  employment and exports from SEZs and if so, the details thereof along with the corrective measures taken by the Government in this regard; and
- (d) whether the Government has given more time to the developers of SEZs to complete their projects and if so, the details thereof along with the reasons therefor?

## ANSWER

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THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (INDEPENDENT CHARGE) (SMT. NIRMALA SITHARAMAN)

a) to  d): A Statement is laid on the Table of the House.

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## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (d) OF LOK SABHA STARRED QUESTION NO. 228 FOR ANSWER ON 14 TH  MARCH, 2016 REGARDING 'EXPORTS FROM SEZS'

- (a): Exports from the Special Economic Zones (SEZs) during the last three years and current financial year exports from the SEZs are as under:

| Years                               | Exports (Rs. in crore)   | Growth/decline over previous year                                |
|-------------------------------------|--------------------------|------------------------------------------------------------------|
| 2012-2013                           | 4,76,159                 | 31%                                                              |
| 2013-2014                           | 4,94,077                 | 4%                                                               |
| 2014-2015                           | 4,63,770                 | -6.13%                                                           |
| 2015-2016 (April to December, 2015) | 3,41,685                 | -1.89% (corresponding period of previous financial year 2014-15) |

(b): Export  Promotion  Council  for  EoUs  and  SEZs  (EPCES)  has  been  undertaking several  activities  for  enhancing  exports  as  well  as  resolving  issues  concerning  EoUs and  SEZs.      During  the  year  2015-16,  a  number  of  meetings  with  Hon'ble  Minister, Commerce and Industry and Senior Officers of Department of Commerce have been held to resolve the issues concerning to SEZs.

- (c): Ministry  of  Finance  has  withdrawn  the  exemption  from  Minimum  Alternate  Tax (MAT)  to  SEZ  Developers  and  Units  with  effect  from  1 st April,  2012,  and  also  the exemption of Dividend Distribution Tax (DDT) in the case of SEZ Developers under the Income-tax Act for dividends declared, distributed or paid after 1 st June, 2011.  Details on  investment  made,  employment  generated  and  exports  from  SEZs  during  the  last three years and current financial year is shown below:

| Financial Year(s)                  | Investment* (Rs. in crore)   | Employment* (Persons)   | Exports (Rs. in crore)   |
|------------------------------------|------------------------------|-------------------------|--------------------------|
| 2012-13                            | 2,36,717                     | 10,74,904               | 4,76,159                 |
| 2013-14                            | 2,96,663                     | 12,83,309               | 4,94,077                 |
| 2014-15                            | 3,38,794                     | 14,42,316               | 4,63,770                 |
| 2015-16 (April to December, 2015 ) | 3,73,446                     | 15,56,537               | 3,41,685                 |

In order to boost exports from SEZs Government periodically reviews the policy and operational framework of SEZs and takes necessary measures so as to facilitate speedy and effective implementation of SEZs.  Review meetings with the Development Commissioners of SEZs are held regularly.  Further, open house meetings with SEZ stakeholders, Road Shows have been organised in various places of the country to give wide publicity of SEZs.

(d): In terms of Rule 6(2)(a) of the Special Economic Zones Rules, 2006, the letter of approval granted to a SEZ developer is valid for a period of three years within which time  effective  steps  are  to  be  taken  by  the  developer  to  implement  the  approved proposal. The Board of Approval (BoA) may, on an application by the developer, extend the  validity  period  of  the  letter  of  approval.  Some  SEZs  developers  have  sought extension of validity period of the letter of approval granted to them for the execution of their  projects  for  various  reasons  including  adverse  business  climate  due  to  global recession,  delay  in  approvals  from  statutory  State  Government  bodies,  delay  in environmental clearance, lack of demand for space in SEZs, unstable fiscal incentive regime  for  SEZs  etc.  During  the  last  three  years  and  current  financial  year  (upto February,  2016),  BoA  has  granted  more  time  to  132  developers  of  SEZ  across  the country to complete their projects.

- *****