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SEZ: NEW PARAMETERS

BETTER . . . BUT, KEEP THINKING

 

The SEZ issue is still clouded by plenty of confusion
VIKASH KUMAR | Issue Dated: April 22, 2007
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BETTER . . . BUT, KEEP THINKING The recent decision of the Empowered Group of Ministers on SEZs, to put a cap on the size and leaving the onus of acquiring land on private developers, comes across as deft political management, rather than economic sense. Some observers, like noted economic analyst Anand Pradhan, told TSI, “There was Hobson’s choice for the government. It has moved two steps backward but it has salvaged its ambitious projects from getting scrapped.”

But the decision has raised more questions than provided answers. Scores of private developers and industrial houses in various stages of implementation of the project will have to either acquire the land afresh on their own, or shelve the project.

All projects for which State governments had acquired or allotted land after 10 February 2006, when the Special Economic Zone Act was notified, shall have to start afresh. Most of the 234 SEZ projects that had formal approval before the SEZ Act was notified would not be affected. The decision could affect mega SEZ projects like Maha Mumbai of Reliance Industry Ltd. (RIL) and the multi-product SEZ in Gurgaon. A senior official in RIL, on the condition of anonymity, told TSI, “Uncertainty is looming over the fate of the Maha Mumbai project. It is impossible to acquire 50,000 hectares from the farmers directly without piggybacking on the State government”. The situation is more or less similar for dozens of other projects that could be affected.

Under the changed circumstances, a private developer, who had relied solely on the land which was to be acquired by the government, has been left virtually without land. If the government has left the onus of acquiring land on the developers, the cap on the size does not make any sense. The policy seems to have been announced hastily and needs fine tuning on various counts, particularly about the rehabilitation of those displaced due to the land acquisition for the project. It is a step forward, but more needs to be done.
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Issue Dated: Feb 5, 2017