SEZs unfrozen, but cut to size

SEZs unfrozen, but cut to size

ECONOMY BUREAU
DATELINE

NEW DELHI, APR 5: The empowered group of ministers (eGoM) on Thursday
paved the way for the notification of 83 special economic zones (SEZs)
that were in limbo for the past 75 days mainly due to controversies over
land acquisitions. It also lifted the ban on fresh proposals for setting
up SEZs.
Government sources said the commerce & industry ministry could
immediately clear 54 SEZs and another 29 soon after. Significantly, the
Centre has asked states not to transfer land compulsorily acquired for
SEZs to private entities.

The eGoM also capped the maximum area for an SEZ at 5,000 hectares,
which states could reduce further if they wish. While no proposal over
5,000 hectares has been cleared so far, the limit will require Reliance
Industries (with plans to set up two 10,000-hectare SEZs in Jhajjar,
Haryana and in Mahamumbai), DLF (8,000 hectare in Gurgaon), Omaxe (6,070
hectare in Alwar) and Mahindras to cut their SEZs to size.

The other major decisions include fixing a uniform limit of 50% on
minimum processing area for all SEZs. Multi-product SEZs were hitherto
required to have a processing area of only 35%. This move will prevent
SEZs from being used purely as commercial real estate.

Big Thaw
• Commerce ministry could now clear 54 SEZs and another 29 later
• States asked not to transfer land acquired for SEZs to private entities
• SEZ area capped at 5,000 ha, which states could reduce further

Since states will now be restricted from transferring land to private
SEZ developers, the onus will be entirely on companies to procure land.
They will have to negotiate with farmers or landowners directly.

SEZ proposals where state agencies had acquired or proposed to acquire
land would not be cleared by the Centre unless a compensation package as
suggested by the national rehabilitation policy was awarded to displaced
farmers, the sources said. Proposals where states have joint ventures
with private entities would not be cleared, either.

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