Modi government drops handicrafts, artisan SEZ in Kutch, Gujarat, says state developers "not interested"

Handicrafts and artisans of Kutch are said to be a major identity of Gujarat's culture, both in the rest of India and abroad. Taking advantage of this, a state-sponsored proposal was floated in June 2007 to develop a Handicrafts and Artisans Special Economic Zone (SEZ) on 132 hectares (ha) land in village village Moti Chiral, near Bhachau town in Kutch district, Gujarat. Eight years after it was "formalized", the Narendra Modi government has dropped it like a hot potato.

The Board of Approvals (BoA), operating under the Government of India's Ministry of Commerce and Industry, has noted that "the progress made by the developers" for setting up the Handicrafts and Artisan SEZ "is not satisfactory", hence the the "Board, after deliberations, decided to cancel the formal approval/notification."
The BoA has, meanwhile, directed the developers -- Gujarat Growth Centres Development Corporation Ltd, with its office in Udyog Bhawan in Gujarat capital Gandhinagar -- to furnish the certificate in a prescribed format certifying that the developer "has not availed any tax/duty benefits including service tax exemptions, if any, under SEZ Act/Rules, or has refunded any such benefits."

Reacting to the development, Gujarat's former BJP chief minister Suresh Mehta, who worked as industries minister under Narendra Modi's chief ministership in 2002, said the development suggests "the Government of India is least interested in small-scale and cottage industries" and is "working for the interests of the big business." Mehta, who belongs to Kutch, quit from the BJP in 2007 protesting against the "authoritarian style" of Modi in Gujarat.

Suresh Mehta

A formal approval for the Handicraft and Artisan SEZ was granted on June 25, 2007. The formal approval was granted to the developer on June 25, 2007, which was last extended up to June 24, 2011. An official Commerce Ministry note says, "the matter with the developer" was taken up "several times" but "no communication" was received." And since the developer failed to initiate "any development activity", it was recommended to cancel its "formal approval."
Interestingly, the Gujarat Growth Centres Development Corporation Ltd was floated as a public company, incorporated in December 1992, and was registered at registrar of companies, Ahmedabad with an authorized share capital is Rs 1,000,000,000 and its paid up capital is Rs 363,500,064. Its last annual general meeting was held on August 29, 2013 "and as per records from Ministry of Corporate Affairs (MCA), its balance sheet was last filed on 31 March 2013", the official government note said.

Among half-a-dozen directors two were senior IAS officials, BB Swain, who is currently managing-director, Gujarat Industries Development Corporation (GIDC), and S Jagadeesan, former energy secretary, who retired two years ago.
Sources say, even earlier, the Gujarat government was not quite keen in developing the SEZ. In 2010, the GIDC recommended to reduce its size from 132 ha to 15 ha. In addition to this, the GIDC asked for a change in sector of the SEZ from ‘Handicrafts and Artisan’ to just ‘Handicraft’.

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