March 28, 2007

Karnataka Government Cautious on SEZs

BANGALORE: The Karnataka Government is cautious on granting approval to Special Economic Zones obviously after what has happened in West Bengal. Minister for Industries Katta Subramanya Naidu replying to questions of N.H. Shivashankar Reddy and others during Question Hour in the Legislative Assembly on Monday said the State Government would not be a party to acquiring land for the SEZs. It was for the promoters of SEZs to acquire the land and approach the Government for approval. This meant that the promoters had to pay market price to the landowners. He said approval for new SEZs had been kept on hold by the Centre for the last six months pending report of the Group of Ministers (GoM). There was lacuna in the rules framed by the Centre on SEZs, which permitted real estate development. The Minister said the State Government was keen on forming SEZs on its own, particularly in Gulbarga and Bidar. Among the 29 SEZs approved for the State so far, the Karnataka Industrial Area Development Board had obtained permission for one SEZ for the IT sector on 203 hectares of land with an investment of Rs. 49 crore, another SEZ for the automotive sector to come up at Shimoga on 169 hectares of land and with an investment of Rs. 38.61 crore and a third for the food processing sector in Hassan on 15.73 hectares of land with an investment of Rs. 534.58 crore. He said three of the 29 SEZs approved so far had started functioning. Of the 29 SEZs, 19 were in Bangalore Urban District, two each in Mangalore and Bangalore Rural district, three in Hassan and one each in Shimoga, Belgaum and Mysore. The anticipated investment in the 29 SEZs was over Rs. 14,000 crore of which the domestic investment alone was Rs. 13,300 crore. Thus, the foreign direct investment in the SEZs was not more than 10 per cent of the total anticipated investments. The SEZs were expected to provide job opportunities to nearly 10 lakh people. To another question of R. Roshan Baig, the Minister said the KIADB had sanctioned 1,183 acres of land to the multinational companies in the industrially developed areas adjoining Bangalore.