A bill which seeks to allow trusts to set up units in special economic zones by amending the SEZ law was passed by Lok Sabha Wednesday.
The Special Economic Zones (Amendment) Bill, 2019 became the first legislation to be passed by the newly-constituted 17th Lok Sabha.
It will now be moved for passage in Rajya Sabha where the government lacks numbers.
Introducing the bill, Commerce and Industry Minister Piyush Goyal said that special economic zones (SEZs) play an important role in promoting exports and economic growth of the country.
The Special Economic Zones (Amendment) Bill, 2019 will replace the Special Economic Zones (Amendment) Ordinance, 2019, which was promulgated in March.
The ordinance had paved the way for trusts to set up units in these zones.
Responding to questions on the need to bring the ordinance by the previous government, Goyal said since Parliament was not functioning and the bill was stuck, the ordinance was issued.
The minister also rejected suggestions by Congress leader in Lok Sabha Adhir Ranjan Chowdhury that the concept of SEZ has failed in India.
He said if desired results have not been achieved, the previous Congress-led UPA government is to be blamed. He said withdrawal of tax incentives in 2011 was a major reason for the SEZ not giving the expected results.
Goyal said in 2014, SEZs created 12 lakh jobs, and in 2019, it rose to 20 lakh.
After the ordinance was issued, the government has so far received six applications to set up SEZs, he said.
Chowdhury and Bhagwant Mann (AAP) questioned as to why Jharkhand and Punjab lack SEZs.
Goyal said that it would be a good step to include trusts and any other entity or business forms which would come in the future in the definition of "persons" under the SEZ Act 2005.
He added that the law came in 2005 and things have changed since then and now trusts have come forward for investments.
Goyal also said that to make India an international financial centre, the government had set up GIFT city in Gujarat and has planned to set up in other parts also. The city is a kind of SEZ.
"This is a fast evolving world and we have to move forward with this," he added.
Later moving a resolution opposing the ordinance, RSP's N K Premachandran said that an ordinance can be brought only under compelling circumstances as per the Constitution and the government is not following this.
"This is not a good practice and good governance...What was the exigency or emergency to bring this ordinance. I can not find any reason to promulgate such an ordinance at a time of election," he said.
He asked as to whom the government wanted to benefit through this ordinance.
He alleged that allowing the government to notify any entity to set up units in SEZs would take away powers of Parliament to take a call on such issues.
By allowing this, it would be up to the fancy of the government to permit such entities to set up units and enjoy benefits, he added.
The resolution was later rejected by the House by a voice vote.
Participating in the discussion, Rajiv Pratap Rudy (BJP) said the government has taken steps to promote economic growth through these laws and not to benefit any individual.
He, however, expressed concern that very few or no SEZs were set up in states like Uttar Pradesh, Bihar and Jharkhand.
Rudy also said that large tracts of land were acquired for SEZs but only limited land was utilised for the purpose.
Supriya Sule (NCP) supported such zones, saying they are an essential part of the job creation ecosystem.
B Mahtab (BJD) wondered whether investments would come in the SEZs at a time when the world market is facing a gloom and said taking ordinance route should be avoided.
Participating in the discussion, Shashi Tharoor (Congress) said SEZ can be driving engines of the economy, but resorting to ordinance should be stopped.
He also said that "the new India should start giving credit to the old India".
Sudip Bandyopadhyay (TMC)sad, "We oppose any type of ordinance unless urgently needed...This government has the habit to project any small idea as big idea."
Senthil Kumar (DMK) questioned the government on the urgency of issuing the ordinance.
Vinayak Raut (Shiv Sena) said that more and more SEZs should be set up on barren land.
The bill was later passed by a voice vote.