More than six months after the state cabinet approved a new industrial policy that allows special economic zones (SEZs) to exit through integrated industrial areas (IIAs),only one company has applied for de-notification. While the policy got cabinet nod in January,Legislative Assembly approved the amendment to Maharashtra Industrial Development Corporation Act only on Wednesday. Pune-based Bharat Forge has sought de-notification of its 4,500-acre multi-product SEZ in Khed,saying the central levy of minimum alternate tax rendered the 74:26 joint venture (JV) with MIDC unviable. After the cabinet approval,companies whose land is locked in SEZs were given six months to apply for de-notification. However,since the amendment to MIDC Act took so long,the six months will start after the approval of the Legislative Council and the governor. While the policy was suggested in early 2011,a disagreement between ruling alliance partners Congress and NCP delayed approval. MIDC CEO Bhushan Gagrani said it was a two-stage process. The first includes applying for de-notification of SEZ status and the second seeking IIA status. IIAs should reserve 60 per cent of space for industrial productivity and use 40 per cent for residential and commercial activities. These areas will be granted 1 FSI. An additional 0.5 per cent FSI can be acquired on premium. IIAs will grant additional concessions to revive small- and medium-sector industries. Proposals for these projects will be cleared by MIDC. Bharat Forge owner Baba Kalyani said while SEZs were meant to be tax-free zones encouraging export,tax regime changes by the Centre had made them financially unviable. There is no demand for plots in SEZs since there are no tax benefits. Availability of land has also become an issue. While we plan to keep part of the area for an SEZ,we have asked for the remaining to be converted to an IIA. Another factor that prompted this decision was the difficult situation in the automobile industry, he said. Bharat Forge,which acquired 1,700 acres,has so far managed to sell only one plot measuring 12 acres.
