The Union government is finally planning to do away with the Special Economic Zone (SEZ) programme it had launched in 2006 with much fanfare. While the existing SEZs will continue to remain operational, those approved might not be notified and developers be allowed to utilise the land for other purposes. It is expected that the government's decision comes in the wake of a series of controversies and scams plaguing the SEZ programme.
The Union Commerce Ministry has asked the Export Promotion Council for export oriented units (EoUs) and SEZs (EPCES) to commission a study to Icrier to find if SEZs have met the economic objectives for which the programme was rolled out. It has been given six months for the study. Ministry officials said this had been done to end the turf war between the commerce and finance ministries, as the latter believed some numbers given out by the former on exports, investments and jobs in SEZs were exaggerated.
There has always been some tension between the two ministries over the success of SEZs. So, we are doing a study by a neutral organisation on whether it has been able to measure up to its objectives. Else, we see no point in continuing with this scheme and giving them tax subsidies, said a senior commerce department official.