Right policy to help SEiZe imagination

[TIMES NEWS NETWORK Wednesday, February 28, 2007 03:07 hrs] |RSS Feeds

They may be the flavour of the season but the SEZ-rush can have its own
problems. The special economic zone (SEZ) policy needs to be amended and
suitable safeguards put in place to address concerns related to
land-grabbing, food security, revenue loss and uneven growth. According
to the Economic Survey for 06-07, the recent debate about SEZs
illustrates the kind of considerations that have to be taken into
account in the formulation of policies.

Listing out apprehensions expressed by various quarters, the Survey
pointed out that acquisition of prime agriculture land could have
serious implications on food security and there could be "misuse" of
land by developers for real estate. Large-scale land acquisition by
developers may lead to displacement of farmers with meagre compensation,
it said.

Other apprehensions highlighted in the survey include uneven growth
aggravating regional inequalities, revenue loss and a possibility of
relocation of industries in SEZs to take advantage of tax concessions.

The survey, however, added that many of these apprehensions could be
addressed through appropriate policies and safeguards. It pointed out
that various issues, including those raised by political parties, are
being addressed by the empowered group of ministers (eGoM) on SEZs.

Highlighting the positive aspects of SEZs, the survey stated that in
2005-06, exports from functioning SEZs — mainly former export processing
zones converted into SEZs — was worth $5 billion. There are 1,016 units
in operation in these SEZs providing direct employment to over 1.79 lakh
people. Private investment in these SEZs is to the tune of Rs 3,163 crore.

After the SEZ Act and rules came into effect in February 2006, formal
approval has been granted to 236 and in-principle approval to 164
proposals. Of those that have been granted formal approval, a total of
63 have been notified.

The notified SEZs have already attracted investments worth Rs 11,194
crore in the last year, providing direct employment to 15,000 workers.
The survey added that once all the 63 notified SEZs become fully
operational by 2009-end, total investments will touch Rs 58,459 crore
and 8.9 lakh new jobs would be created.
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