Videocon allowed to pull out of West Bengal, L&T from Tamil NaduThe Board of Approval (BoA) under the Commerce Ministry on Tuesday approved the proposal of Tata Consultancy Services (TCS) to set up a special economic zone (SEZ) at Indore in Madhya Pradesh.
The BoA allowed L&T and Videocon Realty and Infrastructure to withdraw SEZ projects. The L&T project was to come up at Coimbatore in Tamil Nadu. “We are not going to hold back on those who do not want to set up their SEZs and instead exit. The Ministry will never stand in their way and instead facilitate the process,” a senior official said after the BoA meeting here.
The Videocon firm had approached the Centre to withdraw its project at Jalpaiguri due to “latest business outlook” in the Northern region of West Bengal. It had been granted a formal approval in May 2009.
Eleven developers, including that of Parsvnath SEZ, had requested for extension of time for execution of their projects. Out of 381 notified zones, only 148 have become operational. The maximum number of SEZs is in sectors such as IT/ITeS, engineering, electronics, hardware and textiles.
It also allowed the Videocon group to pull out from its SEZ project at Jalpaiguri in West Bengal and L&T from Tamil Nadu.
Official sources said the green signal to TCS proposal and a few other promoters had been given at a time when SEZs had lost sheen as a vehicle of investment in the wake of imposition of Minimum Alternate Tax (MAT) on the SEZ developers and units in the zones. Slowdown in the realty market has also added to the uncertainty among developers.
The Commerce Ministry, the nodal authority for the SEZs, seems concerned over the entrepreneurs losing interest in these zones, which were initially meant to be tax-free areas. “SEZs will be strengthened if we allow people to come and go as and when they want,” the official said.