New norms for SEZ development soon

Board of Approvals to meet today to advise States
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150 proposals cleared so far
People's groups seek repeal of SEZ Act
Official denies any tax loss

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NEW DELHI: The Board of Approvals (BOA) for Special Economic Zones will
shortly lay down new guidelines for developing such zones, including on
land acquisition.

Disclosing this here on Wednesday, Special Secretary in the Commerce
Ministry, G. K. Pillai, said the board, which is meeting on Thursday,
would consider guidelines on the percentage of processing and
non-processing areas in the SEZs, development of social infra- structure
within SEZs and the approvals process.

The board is meeting for the first time after the ceiling of 150 SEZs
was lifted by the empowered group of ministers.

Farmers' allegations

Mr. Pillai, who was speaking at a conference organised by the
Confederation of Indian Industry (CII), said the board would be meeting
the representatives of State governments on Thursday to advise them on
land acquisition for SEZs.

The move to lay down guidelines for land acquisition is a fall-out of
criticism over the government's SEZ policy, including allegations that
farmers' land is being taken over to benefit big companies.

Later in the day, a special delegation on behalf of the concerned
people's groups like the National Alliance of People's Movement and the
Maharashtra SEZ Virodhi Sangharsh Samiti submitted a memorandum to the
Union Commerce Ministry seeking repeal of the SEZ Act and a larger
public consultation with the people's groups.

During an hour-long discussion with Mr. Pillai, the delegation
highlighted issues related to large-scale displacement, loss of
sustainable farm-based livelihood, huge environmental loss and abuse of
labour rights in the SEZs.

In a release issued after the meeting, the delegation said the Special
Secretary had agreed to convene a meeting of the Board of Approvals with
the people's groups within 30 days to discuss the various issues raised
by them.

He also promised to organise a separate meeting of Chief Secretaries of
States with people's groups soon while assuring that the delegation's
concerns on SEZ projects would be raised in Thursday's meeting of the BOA.

Innovative models

Seeking to respond to some of these issues at the CII meeting, Mr.
Pillai said some companies such as Bharat Forge had adopted innovative
models to take along displaced people by offering them equity shares,
providing training and jobs in the SEZs besides monetary compensation
for the land.

He said the 150 proposals cleared by the BOA so far would come up on
26,800 hectares, which was either already acquired by State industrial
development corporations or companies and there was no fresh acquisition.

Another 225 applications were pending that would cover 75,000 hectares.
Besides, he stressed that no land on which two crops in a year could be
grown would be acquired.

Responding to the criticism that the SEZ policy would create regional
imbalances, he said the board would now be taking up proposals from the
States that had been slow to react on this issue.

Proposals were now being received, he said, from Orissa, Jharkhand,
Chhattisgarh, Uttaranchal and West Bengal.

He rejected the controversy over a projected tax loss of Rs. 90,000
crore over the next few years. "The Ministry has analysed this and feels
that the net benefit to the government through indirect taxes will be
Rs. 45,000 crore," he said.

Besides, he felt that the SEZs provided world-class infrastructure to
attract both local and foreign investment. "Industry is attracted by
offering land at concessional rates and social infrastructure.
Developers get a ten-year tax holiday and SEZ units, 15 years. In the
process, India is creating world-class infrastructure," he said.

http://www.thehindu.com/2006/09/21/stories/2006092104931700.htm