The central government has given the go ahead to set up a Special Economic Zone (SEZ) in Jharkhand.

The proposal, pending since August 2003, was cleared April 25 by the commerce and industry ministry.

The SEZ is to come up on 90 acres of land at Adityapur in Jamshedpur, 130 km from Ranchi. The Adityapur Industrial Development Authority (AIDA) has been made the nodal agency of SEZ.

"The SEZ will be developed for automobiles and light engineering industries products," an official of the chief minister's office told.

In Jharkhand, export of automobile parts stood at Rs.200 million ($4.5 million) during 2001-02. It is expected to go up to Rs.1.07 billion during 2006-07.

Castings prepared in Jharkhand are exported to Nepal, Bhutan and Bangladesh, and auto parts made here are exported to Italy, Malaysia and Argentina, he said.

The SEZ will have around 35 to 40 automobile industrial units. The cost of setting up SEZ will be about Rs.180 million ($4.1 million).

"Uninterrupted power supply will be provided at SEZ and also good roads. The customs and excise department offices will be set up there so that clearance of exports will be no problem," the official said.

Industrial units would be set up on 63 acres of land and 18 acres would be developed as green land in SEZ.

The Jharkhand government has sent a proposal for another SEZ - for agro-based industries in Ranchi. The proposal is pending with the central government.