CAG trashes SEZ Policy for diverting land to realty projects
SEZs Policy has ended up diverting huge tracts of land acquired for setting up manufacturing facilities and generating jobs to real estate projects
Nov 29, 2014
Source : Business Today

 

New Delhi: The Comptroller and Auditor General of India (CAG) has trashed the Special Economic Zones (SEZs) Policy as it has ended up diverting huge tracts of land acquired for setting up manufacturing facilities and generating jobs to real estate projects for making a fast buck.

"We noted a trend wherein developers approached the government for allotment/purchase of vast areas of land in the name of SEZ. However, only a fraction of the land so acquired was notified for SEZ and later denotification was also resorted to within a few years to benefit from price appreciation," a CAG report tabled in Parliament on Friday stated. Land appeared to be the most crucial and attractive component of the scheme, it added.

The audit report found that the figures for employment creation, exports and economic activity being projected by the commerce ministry to push the policy were not properly verified and have turned out to be highly exaggerated. In terms of area of land, out of 39,245.56 hectares notified in the six states (Andhra Pradesh, Gujarat, Karnataka, Maharashtra and West Bengal), 5,402.22 hectares (14 per cent) was denotified and diverted for commercial purposes in several cases, it said.

Many tracts of land acquired are not serving the objectives of the SEZ Act, the report said.

In Andhra Pradesh, Karnataka, Maharashtra and West Bengal, 11 developers had raised Rs 6,309.53 crore of loan through mortgaging SEZ lands. Out of which, three developers had utilised the loan amount (Rs 2,211.48 crore) i.e 35 per cent, for the purpose other than the development of SEZ as there was no economic activity in the SEZs concerned.

SEZs had availed tax concessions to the tune of Rs 83,104.76 crore between 2006-07 and 2012-13. "Our review of the tax assessments indicated several instances of extending ineligible exemptions to the tune of Rs 1,150.06 crore and systemic weaknesses in direct and indirect tax administration to the tune of Rs 27,130.98 crore," the report added.

Generation of employment opportunities, encouraging investment and increasing India's share in global exports are the three important objectives of the SEZ Act, 2005.

Performance of sampled SEZs (152) in the country indicated "non performance" in employment ranging from 65.95 per cent to 96.58 per cent in investment ranging from 23.98 per cent to 74.92 per cent and in the case of exports ranging from 46.16 per cent to 93.81 per cent.

Another significant trend in the SEZ growth has been the preponderance of IT/ITES industry, which accounted for 56.64 per cent of SEZs, while only 9.6 per cent were catering for the multi-product manufacturing sector.

 

Latest Realty News

DDA goes for image makeover with luxury houses in west Delhi
Nov 29, 2014
New Delhi: Delhi Development Authority (DDA) is all set to give top private builders of Delhi-NCR a run for their money
In 3 years, Robert Vadra firms reaped up to 600 per cent profit in land deals
Nov 29, 2014
Three companies owned by Robert Vadra, son-in-law of Congress president Sonia Gandhi, made profits up to 600 per cent within three years of investment in real estate in Rajasthan
US Realty Market Emerges as Investment Destination for Indians
Nov 28, 2014
Mumbai: With the US market emerging as an attractive investment destination, there is a growing interest from Indians to buy properties there, property consultant Jones Lang LaSalle (JLL) said
DDA to launch bigger housing scheme in 2016
Nov 28, 2014
New Delhi: If you have not managed to get a flat in the Delhi Development Authority’s (DDA) housing scheme, there’s still hope
Priyanka Chopra to endorse real estate group
Nov 28, 2014
Delhi: Bollywood actress Priyanka Chopra was roped in to endorse Unnati Fortune Group, a real estate entity
'Smart city' buzz sends land prices soaring around Visakhapatnam
Nov 28, 2014
VISAKHAPATNAM: All the buzz about transforming Vizag into a `smart city' seems to have sent rates of land in and around the Port City spiralling northwards
Produce original lease document in 7 days or give up possession of govt land
Nov 27, 2014
INDORE: Noose tightened around lease holders for alleged misuse of government land
Illegal flats on fringes find political support
Nov 27, 2014
PUNE: Even before the government takes a call on legalising illegal constructions, word is out in the fringe realty market
National body seeks legal sanction for RWAs
Nov 27, 2014
NOIDA: The recently formed Confederation of All Residents' Welfare Association (CARWA) has sought legal sanction for all RWAs in the country
Realty stocks surge over 4% as RBI eases rules for low-cost home loans
Nov 27, 2014
MUMBAI: Realty index rallied after taking cue from the RBI announcement of easing rules for low-cost home loans

Latest Realty News Of State

Realty Talk's