Chief minister Devendra Fadnavis' pet project to construct International Financial Services Centre (IFSC) at Bandra-Kurla Complex (BKC) has received a major setback.
Chief minister Devendra Fadnavis' pet project to construct International Financial Services Centre (IFSC) at Bandra-Kurla Complex (BKC) has received a major setback. The Centre has rejected the state's proposal to notify BKC as a Special Economic Zone (SEZ), which was mandatory for the project's success. The SEZ status will pave way for giving tax incentives and other benefits, including those related to duty-free imports, to domestic and global investors planning to set up their business units in IFSC.
Mumbai Metropolitan Region Development Authority (MMRDA), which is headed by Mr Fadnavis, had submitted a proposal to get a 20-hectare plot in BKC notified as Special Economic Zone (SEZ). The Union ministry of commerce has, however, rejected it on grounds that as per rules such a project requires a minimum of 50 hectares to be eligible for the SEZ’ tag. The state can't provide SEZ-like benefits on its own, said sources.
According to norms, SEZ-notified zone should at least measure around 50 hectares, whereas in case of BKC, it is only 20 hectares. The state had earlier urged the Centre to relax norms citing a land crunch and assuring that the same would be compensated through vertical development, that is, by giving additional Floor Space Index (FSI) for construction.
“The Centre rejected the proposal for IFSC as the minimum requirement of 50 hectares for the SEZ was not met. It has cited that norms cannot be relaxed," said a senior state government official.
Subsequently, MMRDA is said to have sent a fresh proposal to the ministry of commerce by clubbing another plot, measuring 30 hectares, hence increasing the plot size to 50 hectares in order to be qualify for 'SEZ' tag. MMRDA, the implementing agency of the project, is set to appoint a consultant to design the layout of the project.
Pravin Darade, additional metropolitan commissioner, MMRDA, said, "We have identified a 30-hectare plot adjacent to the 20-hectare plot. A fresh proposal would be sent to the ministry of commerce for consideration. As of now, the 30-hectare plot is reserved for a recreational ground (RG).”
Another reason for the rejection of the IFSC proposal was that the state's assurance, to compensate the shortage of land area through vertical development, was infeasible as the civil aviation guidelines restrict FSI after a certain limit at BKC.