The government on tuesday permitted IT software major Tata Consultancy Services (TCS) to set up a Special Economic Zone (SEZ) at Indore in Madhya Pradesh, even as it allowed Videocon group to pull out from its SEZ project at Jalpaiguri in West Bengal.
"SEZ proposal by TCS has been cleared," a Commerce Ministry official said after meeting of the Board of Approval (BoA).
The green signals to TCS and a few other promoters have been given at a time when SEZs have 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 the 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," a Commerce Ministry official said.
The BoA allowed L&T and Videocon Realty & Infrastructure to withdraw SEZ projects. The L&T project was to come up at Coimbatore in Tamil Nadu.
"Yes, whosoever has asked to exit, we are not standing in their way," he said.
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 Ltd had requested for extension of time for execution of their projects.
Out of 381 notified zones in the country, only 148 have become operational. The maximum number of them are in sectors such as IT/ITES, engineering, electronics, hardware and textiles.
Commerce Ministry has floated a discussion paper to revamp its SEZ policy.