SEZ developers in India will be able to get easier access to funds and at cheaper interest rates if the government goes ahead with a proposal to give infrastructure status to the sector. The commerce department has decided to make a strong case for grant of the status to SEZs with the Reserve Bank of India. Officials from the commerce department and the RBI are scheduled to meet soon to reach a decision on the issue.

Commerce secretary G K Pillai is scheduled to meet RBI deputy governor Usha Thorat shortly to discuss whether SEZs deserve to be included in the core sector.

Since half the area on which SEZs are built have to mandatory be part of the processing area which constitutes industrial infrastructure and a large part of the non-processing area is social and commercial infrastructure to support the processing area, the commerce department believes that the sector qualifies for infrastructure status.

Since SEZs are classified under the real estate sector, funds earmarked for real estate by banks are often exhausted and there is not enough funding available for SEZ projects. If given infrastructure status, SEZ developers would be eligible for funds earmarked for infrastructure projects. To top that, funds would also be cheaper as banks lend to the core sector at a 2% lower interest rate.

While initially, multi-product SEZs were allowed to have 35% processing area, under the revised guidelines all SEZs mandatory have to have processing activities in 50% of the total SEZ area. In the non-processing area there is infrastructure to support the processing area like power plants, sewage treatment plants, roads, hospitals and educational institutions.

According to figures furnished by the export promotion council of EOUs and SEZs, the exports from EOUs and SEZs in the last five years have gone up from Rs 33,647 crore to Rs 1,91,638 crore, showing a 5.7 times growth. Last year, exports from SEZs have gone up from Rs 34,787 crore to Rs 66,638 crore, showing a growth of 93%.