Parliament approved amendment to the SEZ legislation to allow trusts to set up units in special economic zones.

By Abhay Shah, Realty Quarter

The Rajya Sabha gave its nod to the Special Economic Zones (Amendment) Bill, 2019, on Thursday, a day after it was passed by the Lok Sabha. The Bill will substitute for the 2019 Special Economic Zones (Amendment) Ordinance, issued in March. The decree paved the way for trusts in these areas to set up units.

In response to the discussion on the Bill, Minister for Commerce and industry Piyush Goyal said, “This is a minor amendment, which has a major effect on investment, employment and development. We’ve had eight proposals from such trusts so far. Total investment suggested by these trusts turns out to be Rs.8,000 crores,” said Goyal, adding that the state expects about USD 3 billion, which is about Rs.20,000 crores investments annually.

The previous government withdrew exemptions in income tax, dividend distribution tax and MAT, which meant that the SEZ framework was under certain stress, He added that several investors were left in the lurch. “At the end of March 2019, SEZs investment was a tremendous Rs.5 lakh crore plus, and SEZ employment were more than 20 lakhs, and more than Rs.7 lakh crores were export,” he said. The Minister said that no one can deny that these SEZs are a “development engine and job creation pathway.”

D Raja of the CPI participated in the discussion to corner the government to take the order to the SEZs with the speed. “We have significant apprehensions about this bill,” Raja said and prompted the minister to address these issues. Contrary to the bill, TKS Elangovan from the DMK challenged the importance of passing the order and said that the Parliament was “insulted.” Sanjay Singh, a member of the AAP, wanted to know whether the government was having any policies, returning unused land to farmers and providing employment for local SEZ people.

Derek O’Brien, leader of TMC, said that his party was heavily against SEZs because that company system had not performed in India. P Bhattacharya (Congress) said for SEZs only barren land should be used and not agricultural land.

The BJP’s Swait Malik endorsed the bill and said it would increase financial development and investment from overseas countries. Naresh Gujral of Akali Dal backed the bill and told the country needed FDI but he requested that the government adopt consistent policies to give some confidence to the investors. Globally, Gujral stated that trusts are a very prevalent way to get investments, mentioning the instance of Real Estate Investment Trusts (REITs). Ram Gopal Yadav (SP) supported the bill and inquired about government scrutiny of the trust investing in SEZs. Earlier in the move of the Bill, Goyal stated that laws must be introduced to ensure that investments in specific financial areas in India can be made via a trust system into special economic zones in India.