In order to ensure that only serious players vie for special economic zones (SEZs), the government on Thursday prescribed minimum investment and net worth criteria for the promoter company, group company or flagship company seeking to develop a zone. Either of the two criteria will be applied while considering applications for such zones.
The inter-ministerial Board of Approval, the nodal agency for approving these zones, which met here on Thursday, decided on a minimum investment of Rs 250 crore (Rs 2.50 billion) and net worth of Rs 50 crore (Rs 500 million) in industry-specific zones.
It also set a minimum investment of Rs 1,000 crore (Rs 10 billion) and net worth requirement of Rs 250 crore for multi-product zones. For information technology zones, the minimum investment has been set at Rs 100 crore (Rs 1 billion).
However, proposals not meeting these criteria would be considered by the board, but only if there was sufficient justification, an official release said.
The new norms will be applicable to all 225 applications for developing zones pending for approval. Commerce ministry officials added that the new norms had already been informally applied while approving zones in the past.
Briefing reporters after the board's meeting, GK Pillai, special secretary in the commerce ministry, said there would be maximum indicative limits on the quantum of social infrastructure allowed to developers, on which concessions, exemptions and drawback benefits were available.
"In case of sector-specific zones, the maximum limit is 7,500 houses, 100 hotel rooms, 25-bed hospitals, and schools or educational institutions of up to 25,000 square metres. Overall construction of office space, shopping arcades, multiplexes and retail space in sector-specific zones cannot exceed 50,000 square metres. The limits in multi-product SEZs is 25,000 houses, hotels with up to 250 rooms, medical centres including hospitals with up to 100 beds and schools or educational institutions of up to 2,50,000 square metres," he said.
Pillai said the limits could be increased if a developer was able to justify the need for having more infrastructure. "In the case of housing, no outright sale of flats will be permitted. The developer will only be allowed to give the flats on lease," he said.
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