IndiaPost.com - SEZs limited to a maximum of 5,000 hectares

NEW DELHI: Having learnt a bitter lesson following the violence at Nandigram in West Bengal, the Indian government last week yielded to political pressure and decided to keep the State governments out of acquiring land for setting up special economic zones (SEZs), while limiting such zones to a maximum of 5,000 hectares.

While fine-tuning the policy norms at its meeting here in the wake of a raging controversy over the issue, the empowered Group of Ministers (eGoM), headed by External Affairs Minister Pranab Mukherjee, also lifted the freeze by approving 83 new SEZs which have no land dispute, thus giving a clear indication that the process of industrialization will in no way be compromised.

Briefing newspersons after the eGoM meeting, Commerce Minister Kamal Nath said: "No State can compulsorily acquire land from farmers through [the] Land Acquisition Act... Promoters will have to themselves go to farmers and acquire land at commercial rates." In a sort of compensation to promoters while setting the 5,000-hectare limit on SEZs, the eGoM decided to increase the minimum processing area limit of such economic zones to a uniform 50 per cent of the land size.

"The decision will be applicable to all SEZs, including those which have already been notified," Nath said. However, the State governments would have the powers to further reduce the size of SEZs to less than the 5,000-hectare limit set by the Centre, he said. Earlier, the minimum processing area requirement for multi-product SEZs was 35 per cent, with a provision for relaxation up to 25 per cent by the Board of Approvals (BoA), while it was pegged at 50 per cent for sector-specific SEZs.

Apparently, the eGoM's decision on setting a limit on the size of SEZs would hurt the programs of a number of companies and real estate developers such as Reliance Industries, DLF and Omaxe which have plans to set up mega SEZ projects.

More importantly, while the eGoM has requested the Ministry of Rural Development to reformulate a comprehensive land acquisition Act to address all relevant issues, a new relief and rehabilitation policy also is to be finalized soon. Under the new rehabilitation policy, Nath said that at least one member of each displaced family would have to be employed in the project.

This, he said, would be in addition to the compensation paid to the farmers for the land. With the freeze now lifted, the Centre is set to approve all pending applications for SEZs in which where there are no land disputes. Of the 234 SEZs armed with formal approvals, 63 have been notified already. The BoA now has to take up 162 SEZs with in-principle approval, apart from the 140 pending applications.