Saturday, July 07, 2007

Rehab policy, fertile land security may hold up SEZ notifications

TNN[ SATURDAY, JULY 07, 2007 04:17:27 AM]

NEW DELHI: The policy on special economic zones (SEZ) may have to face
another test. The parliamentary standing committee on commerce has
recommended a freeze on all new notifications and clearances till SEZ
rules and Act are amended to protect fertile agricultural land and
safeguard the interest of farmers and other stake holders.

The committee has suggested a ceiling of 2,000 hectares for
multi-product SEZs built on land that includes cultivable paths. The
present ceiling of 5,000 hectares has been recommended only for
multi-product SEZs built on wasteland.

Proposing a ban on use of irrigated double-crop or multi-crop land for
setting up SEZs, the panel said normally only waste and barren lands
should be used. If unavoidable, the committee said that only
single-crop, rain-fed land should be used up to an extent of 20% of
total area for multi-product SEZs and 40% of total area for others.

While the recommendations of the committee are not binding on the
government, the commerce ministry has to give a point-by-point reply to
all questions raised in the report within three months. The report,
which will be submitted in Parliament, may also be debated there and
this may mount pressure on the government for further tightening of SEZ

Replying to a question on whether the recommended freeze on new SEZs
should be in place for the entire period of time the amendments are
debated by the government, committee chairman Murli Manohar Joshi said:
"Heavens will not fall if there is a delay of few months."

It may be recalled that a 10-week freeze was imposed on notifications
and clearances of new SEZs on January 22 following widespread resistance
to forcible land acquisition by the government. The freeze was lifted on
April 6 when the government decided to impose a 5,000 hectares ceiling
on multi-product SEZs and increase processing area for all SEZs to 50%
of total area.

The standing committee has also recommended ceilings for smaller SEZs.
For multi-services and sector-specific SEZs, the ceiling recommended is
200 hectares for land including cultivable portions and 500 hectares for
wasteland. For IT, gems & jewellery and biotech SEZs, the limit is 20
hectares for cultivable land and 50 hectares for wasteland.

The land acquisition Act, 1894, should be replaced by a modern
legislation which is relevant to the needs of the time, the committee
said. Unless the public purpose for which the land is being acquired
involves an over-riding national interest like defence or national
security, the acquisition should take place with the consent of the
affected parties, it said.

On a suitable compensation package for farmers and other oustees, the
committee said that monetary compensation should be only a part of the
package and should be calculated on the basis of prevailing market rates.


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