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Tax-free SEZs new havens to stash cash

The CAG report had revealed that several hectares of land acquired for SEZ invoking public purpose were later sold off or used for other purposes.

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Rs 83,000 crore revenue lost on SEZs in 6 years

Reliance oil facility in Gujarat's Jamnagar. Among the groups that diverted land acquired for SEZs are Reliance Industries and Essar Steel, according to the CAG report.

NEW DELHI: Raising doubts on the fairness of allotment of government land to some top corporates for special economic zones (SEZs), the comptroller and auditor general ( CAG ) has said that 47 files related to them have gone missing in the commerce ministry and were not made available to the audit team despite requests.The auditor has published names of all the 47 SEZ developers who were allocated concessional government land at important locations in different cities whose files the commerce ministry refused to share for scrutiny. The CAG audit report on performance of SEZs was recently tabled in Parliament and will now be taken up for discussion by the public accounts committee (PAC).Sources said when the audit team insisted on verifying details of these allotments and status of the projects, the ministry officials said these files were not traceable. “We wrote letters demanding these files, but were told they are not available,” said a senior audit official.These key files involved big SEZ developers such as Moradabad SEZ/Handicraft, two files of DLF Commercial, three files of Infosys related to their SEZs in Mysore, Bangalore and Mangalore and two files of Wipro Ltd. “No details of these SEZ units were available such as whether complete application was made by the developers, whether all the conditions required for approval were met, whether the board of approval carried out proper due diligence on the developers, etc,” the official said.The list of 47 also includes Adani Port and SEZ, Essar Hazira, Moser Baer India in Greater Noida, Mahindra Worldcity, Chengalpattu, Suzlon SEZ, Bengal Shapoorji Infrastructure Development Pvt Ltd, Diamond and Gems Development Corporation (SURSEZ) and L&T hi-tech city among others.CAG has said these cases could not be audited for lack of cooperation from the commerce ministry. The ministry also did not provide the auditor with the current status of these projects, whether the developers started the SEZ projects or the land was diverted for commercial exploitation as has been revealed in several cases during the audit.The CAG report had revealed that several hectares of land acquired for SEZ invoking public purpose were later sold off or used for other purposes. Among the groups that diverted land acquired for SEZs are Reliance Industries and Essar Steel, according to the audit report.The CAG said that SEZs of Essar Steel in Hazira and Reliance Industries Ltd in Jamnagar, Gujarat denotified area of 247 ha and 708 ha respectively, and allotted them to ineligible DTA (domestic tariff area) units.In case of Sricity SEZ in Andhra Pradesh, audit found that 2,070 ha was not used for the intended purpose. This land was allotted by the SEZ operators to private companies such as Alstom, Pepsico, Cadbury, Colgate, Kellogg’s etc.“Land appeared to be the most crucial and attractive component of the scheme. Out of 45,635 ha of land notified in the country for SEZ purposes, operations commenced in only 28,488 ha (62%),” the audit pointed out.The audit found that many developers approached the government for allotment of vast areas of land in the name of SEZ. “However, only a fraction of the land so acquired was notified for SEZ and later denotification was also resorted to within a few years to benefit from price appreciation,” the CAG has said.As much as 5,402 ha of land was denotified in six states and diverted for commercial purposes, the audit found. “Many tracts of these lands were acquired invoking the ‘public purpose’ clause. Thus, land acquired was not serving the objectives of the SEZ Act,” the audit said.