Govt careful about SEZ as BoA meets on Jan 22

New Delhi, Jan 21: With growing opposition to the idea of setting up Special Economic Zones (SEZs) from farmers and disparate political parties, the Government is cautiously stepping ahead so as not to stir up any hornet's nest.

The empowered group of ministers (eGoM) on SEZs, headed by External Affairs Minister Pranab Mukherjee, which meets tomorrow after a five-month gap, will primarily look into land acquisition issues.

Since October, no new SEZ has been approved and the last two meetings of the Board of Approval (BoA) were cancelled due to angry protests over the land acquisition in West Bengal.

The BoA has so far approved final clearances to 237 projects and in-principle nod to another 160. More than half of these zones are in the IT sector.

At its meeting in August, the board had removed the limit on number of SEZs from 150. It had also decided to review the situation in next five months or when 75 SEZs become operational, whichever was earlier.

The government is considering imposition of sector-wise ceiling on SEZ once 100 SEZs are notified. So far, the Government has notified 63 SEZs.

According to ministry sources, preference will be given to land acquisition and rehabilitation of farmers in view of the political overtones of the issue.

Though Commerce and Industry Minister Kamal Nath denied any "moratorium" on fresh approvals for SEZs, it is clear that the Centre has been forced to review carefully before giving clearances for new SEZs.

It has been decided that on the issue of rehabilitation and land acquisition, the State governments will have a proactive role in implementing the SEZ scheme, Mr Kamal Nath underlined in a meeting on Friday. "In recent days, concerns have been raised about the diversion of prime agricultural land for SEZ purpose and the inadequate compensation and rehabilitation problems faced by the affected farmers. This issue was discussed in the SEZ Board of Approval meeting and the general consensus emerged that mainly waste and barren land and if necessary single crop agricultural land alone should be acquired for the SEZs," he said.

Further, the Government has opted to formulate a pro-active rehabilitation policy for people being displaced during land acquisition for SEZs.

Rural Development Minister Raghuvansh Prasad Singh told reporters last week that the policy will come up before the cabinet within a few days. A note in this connection has already been circulated to various ministries.

The heated protests encountered in Singur and Nandigram in West Bengal have forced both the State and Union Government to take a fresh view of the policy.

Welcoming Prime Minister Manmohan Singh's decision not to give approvals to any new SEZs without fully considering all aspects, Mr Prasad Singh said under the new policy provision would be made for rehabilitation before displacement of people. "It would be a pro-farmer policy instead of pro-acquisition policy," he added.

The policy would emphasise on providing house and land before displacing anyone. The rehabilitation package would be much bigger under the new policy which would be replaced by a law ultimately, the Minister said.

The social impact of any eviction would be assessed by an authority and if it felt that the adverse impact overweighed the net gain from the industrial activity, permission would be withheld, the sources said. Since it was first announced in 2005, the SEZ policy has raised a storm of protests from various sections.

However, the Commerce Minister is categorical that SEZs are a vital instrument not only for boosting the country's exports but also for generation of jobs, creation of world-class infrastructure and attracting foreign direct investment (FDI) into the country.

The controversy over land acquisitions has hobbled the approval process for SEZs forcing repeated postponement of the Board of Approvals meetings until a rehabilitation policy is formulated first to help those displaced.

Addressing an awards functions of the Export Promotion Council for Export Oriented Units (EOUs) and SEZs on Friday, Mr Kamal Nath said, "In the next five years, if all the projects get implemented, investments by SEZ developers are expected to be over US 60 billion dollar (Rs 3,00,000 crore). By December 2007, it is expected that investments of Rs 1,00,000 crore including Rs 25,000 crore FDI will take place in the SEZs." "SEZs are expected to employ five lakh people by December 2007.

Many of these SEZs are recruiting people from rural areas and providing them training for operations in the SEZs, as we have seen from the gems and jewellery SEZ in Hyderabad, textiles units in Mahindra SEZ in Chennai and other new SEZs like Nokia, Flextronics in Chennai, Apache SEZ, Brandix Apparel SEZ, Divvy's Laboratories in Andhra Pradesh and Rajiv Gandhi Technology Park in Chandigarh," he said.

UNI