The Rajkot Engineering Associations’ (REA) members had their first meeting on Thursday to discuss the feasibility of the 'Proposed Special Economic Zone for Automobiles'.
According to Naresh Patel, president of REA, "As an association we have taken an initiative to let the members of REA have a detailed understanding on the project of Automobiles Special Economic Zone (SEZ) proposed in Rajkot".
He added, "We also scanned the details of same while discussing it at a length with the officials of Infrastructure Leasing and Financial Services (IL&FS) Limited company who are going to give presentation on it".
SEZ for automobile industry has been widely publicised as the dream venture of Gujarat Chief Minister Narendra Modi.
It was aimed at capturing a slice of the $3 trillion global market in automobiles spares.
A presentation made by Ravi Raman, vice-president IL&FS, saw good response.
The open-house session saw a large number of questions on the benefits in terms of income and taxation policy, as also ownership of land in SEZs.
"As IL&FS was acting as a co-developer of the whole project we are with them right from conceptualisation of the project till commissioning same, however SEZ being treated as a foreign territory within the country; land to be given to units in SEZ will be on lease rental and not on ownership basis, because ownership of the land would be of the developer," said Ravi.
The meeting concluded with a note from the president of REA highlighting the four important factors before SEZs.
Despite the demand for the SEZ for automobile spares, most units in Rajkot had been catering domestic demand only so far and had started exports recently, he pointed out.
Renaming of the SEZ would allow related manufacturers to set up units in the project as there were not enough automobile products exporters in Rajkot, he warned.
He urged companies to decide whether the SEZ was needed immediately for it would mean generation of funds to acquire land for it.
If any factory in the SEZ failed to make the required exports in the five years period allotted, it would have to pay back all the concessional duties with applicable penalty as it would not be treated as an EOU, he cautioned.
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