94 SEZs to be operational by Dec 2007

NEW DELHI: The government on Friday said it is expecting 94 Special Economic Zones (SEZ) to become operational in the next 18 months.

"In 18 months 94 SEZs are expected to come up of which 22, which have already been notified, would be running in next six months," Commerce Ministry officials said.

At present, 150 SEZs have got approval from the government while applications for 225 are pending before the Board of Approval.

The proposals that are pending before the board include those by Posco and one in Haldia. These are likely to be taken up at the next meeting.

According to officials, the country needs up to 300 SEZs. They said that the SEZs are expected to attract investment of up to Rs 100,000 crore, a quarter of which would be Foreign Direct Investment (FDI).

The Commerce Ministry is also of the view that the number of jobs created by the SEZs would be to the tune of 500,000 by December 2007.

The officials also contested the argument that the SEZs would lead to a tax loss of Rs 70,000 crore in direct taxes and said in fact the government stands to gain Rs 45,000 crore annually from them.

"The study undertaken on the tax loss through SEZs assumes that the entire incremental growth in country's exports will come from these SEZs," they said.

According to officials, if the loss in direct tax loss is Rs 70,000 crore than the profits of units in SEZs should be more than Rs 3,50,000 crore and turnover should be five times the profits.