The Rajya Sabha gave its nod to the bill by a voice vote a day after it was passed by the Lok Sabha thus replacing the Special Economic Zones (Amendment) Ordinance, 2019, which was promulgated in March.
The Parliament passed The Special Economic Zones (Amendment) Bill, 2019 on Thursday amid concerns expressed by the opposition parties for allowing trusts to set up units in special economic zones (SEZ).
The Rajya Sabha gave its nod to the bill by a voice vote a day after it was passed by the Lok Sabha thus replacing the Special Economic Zones (Amendment) Ordinance, 2019, which was promulgated in March.
Responding to the objections and reservations raised by the opposition members, minister for commerce and industry, Piyush Goyal said, "This is a small amendment that will have has large impact on investment, job and growth required by the country."
Negating opposition's apprehensions regarding trusts, Goyal asserted that the government is not doing anything it is in line with the guidelines of the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) that have articulated potential forms of investment through the medium of trusts in detail in their policy on Alternative Investment Funds (AIFs).
"In its circular issued on 22 Nov, 2018, the SEBI had brought out the legal framework categorically specifying who can be allowed to invest through alternative investment funds. It was a very detailed articulation by SEBI that included trusts," said Goyal.
The minister clarified that as the trusts or entities are very common form of operating bodies in the financial sector, it has become necessary to amend clause (v) of section 2 of the Act.
The amendment will allow investment proposals worth Rs. 8000 crore in SEZs that were pending from trusts of well known companies and in the long run the government expects investments of about USD 3 billion, which is around Rs 20,000 crore annually, Goyal asserted.
The SEZ framework was facing stress and had left several investors in lurch as the previous government had withdrawn exemptions in income tax, dividend distribution tax and MAT, Goyal added.
"At the end of March 2019, the investment in SEZs was a whopping Rs 5 lakh crore plus and the employment was over 20 lakh in SEZs and export from SEZs was over Rs 7 lakh crore," Goyal said asserting that SEZs are engines of growth and important to acquire US$ 5 trillion mark.
Replying to queries raised by opposition members regarding fertile land being taken away for SEZs, Goyal said the SEZ Act prohibits land to be acquired by farmers barring few exceptions.
Mostly it is meant to be on barren or on land that assists single crop agriculture. If perforce a portion of double crop land is to be acquired for multi-product SEZs then the land should not exceed 10 percent of the total land acquired by the SEZ, he said.
Growth Engines
- The Bill seeks to allow trusts to set up units in special economic zones
- Govt asserts these zones as engines of growth and employment
- Rajya Sabha gave its nod by voice vote, a day after LS passed the Bill
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