Saturday, March 31, 2007

Freeze on SEZs has upset investors: Maran

Staff Correspondent

Urges Centre to relax norms or clear proposals

CHENNAI : Union Information Technology and Communications Minister
Dayanidhi Maran on Friday expressed the hope that Special Economic Zones
(SEZs), which have been approved but put on hold in Tamil Nadu due to
controversy over land acquisition in various states, would be given the
go-ahead as most of them were being set up on land belonging to the
Small Industries Promotion Corporation of Tamil Nadu (SIPCOT).

He said some investors with major plans in the State, especially in
manufacturing sector, were upset over the freeze and might explore the
option of moving to countries like Vietnam if the Government did not
relax the norms or lift the freeze.

Mr. Maran, who was part of the empowered Group of Ministers headed by
External Affairs Minister Pranab Mukherjee, said the committee would
meet next week to discuss issues related to SEZs including relaxation of
norms.

After the inauguration of Kerry Reliable Logistics, he told reporters
here that there were over 20 SEZs, which had obtained in-principle and
final approvals and were to be notified in Tamil Nadu. He urged the
Centre to relax norms or clear SEZ proposals where land acquisition was
not an issue.

Mr. Maran said the land component of any SEZs in Tamil Nadu was not more
than 500 acres. The State had promoted compact SEZs on 200-250 acre
plots acquired by the SIPCOT, the nodal agency to implement
infrastructure development schemes. He said Chief Minister M.
Karunanidhi had written to the Prime Minister, noting that big investors
like Feng Tay Enterprise and Nike Shoes' OEM supplier might move out of
India if the uncertainty continued.

Last year, Hong Kong headquartered Growth-Link Overseas Company, a
subsidiary of Taiwan-based shoe major Feng Tay Enterprise Co Ltd. and
leading original equipment manufacturer supplier to Nike, announced
plans to invest Rs. 300 crore in setting up a shoe manufacturing
facility on over 300 acres at Cheyyar, 90 km from Chennai.
http://www.hindu.com/2007/03/31/stories/2007033119920800.htm

Simmering discontent over SEZs

S. D. NAIK

The consensus among experts seems to be that the economic and other
costs of SEZs are likely to outweigh the so-called benefits because of
the way the rules have been formulated and the loopholes in the policy.
The RBI has, thus, stated that SEZs be treated as commercial real estate
rather than as a priority sector proposition for bank lending, says S.
D. NAIK.


No other major policy of the Government in recent years has been mired
in such unending controversies and sharp inter-ministerial differences
as that on Special Economic Zones (SEZs). The simmering discontent over
the policy in many quarters came into sharp focus after the Nandigram
incident in West Bengal where 12 persons were killed in police firing on
a violent mob. Following the unfortunate incident, the situation became
explosive with nation-wide ramifications.

There are now indications that some of the approved SEZs in other States
may also face trouble. For instance, in Maharashtra, the Finance
Minister, Mr Jayant Patil, has voiced his opposition to his own
government's policy on the issue. Besides making it clear that farmlands
should not be acquired for setting up SEZs, he expressed unhappiness
over too many sops being offered to these zones when no consideration is
being shown to the country's 150 backward districts.

FLAWS AND SHORTCOMINGS


Though much of the public criticism of SEZs, of late, has centred on the
land acquisition process, right from the beginning, the policy has been
riddled with flaws and shortcomings. The overwhelming consensus among
experts seems to be that the economic and other costs of SEZs are likely
to outweigh the so-called benefits because of the way the rules have
been formulated and the loopholes in the policy.

Many have termed the proposed SEZs as real-estate ventures rather than
production and export zones. For the rules require that only 35 per cent
of the area in a SEZ be devoted to productive activity and a developer
can use the rest of the land to build apartments, hotels and commercial
offices.

Not surprisingly, the Reserve Bank of India (RBI) has stated in no
uncertain terms that SEZs must be treated as commercial real estate
rather than a priority sector proposition for bank lending.

The SEZ Act was passed in 2005 and the Commerce Ministry notified the
SEZ law in February 2006. What is most surprising is the unprecedented
rush of applications since then and the speed with which the Ministry
granted some 200 in-principle approvals.

It even succeeded in getting the cap on the number of SEZs removed
despite opposition from the Finance Ministry which was worried about the
estimated revenue loss of Rs 140,000 crore on account of tax exemptions
on raw materials and finished products.

Though India's SEZ policy is said to be modelled on the Chinese
experiments, there is no comparison either with the economic conditions
of the time, the size and location of the zones, their numbers or the
kind of giveaways.

China started with only four SEZs and now has six. It had much greater
compulsions to set up SEZs in its totalitarian regime so as to ensure
its calibrated integration with the global markets by attracting
large-scale foreign direct investment. The conditions in today's India
are different.

GROWING OPPOSITION


The opposition to SEZ policy in its present form has come from several
experts and institutions, including the Ministry of Finance, Ministry of
Rural Development, and the Reserve Bank of India. Dr Jagdish Bhagwati of
Columbia University, the world's most ardent advocate of globalisation,
feels that India does not need SEZs.

"We don't need to learn lessons from China any more, because the main
lesson was outward orientation. We should concentrate on making the
additional reforms for reducing trade barriers."

In September 2006, the then IMF Research Director, Mr Raghuram Rajan,
described India's SEZ policy as a tax give-away that was likely to shift
Indian production to SEZs rather than create new economic activity. He
expressed his opposition to misdirected subsidies, guarantees and tax
sops that a stretched budget could ill afford.

Reservations about the SEZ policy in its present form have also come
from others including Mr Rahul Bajaj, Chairman, Bajaj Auto Ltd; Mr
Narayana Murthy, Chief Mentor, Infosys; and Mr Montek Singh Ahluwalia,
Deputy Chairman, Planning Commission. While Mr Rahul Bajaj suggested
export obligation of 60-75 per cent of production, 60-75 per cent land
for production units and fairer land acquisition process, Mr Murthy has
warned against roping real-estate players into SEZs.

DAMAGE-CONTROL MEASURES


This has now become a classic case of a government announcing a policy
in haste and resorting to a damage-control exercise in instalments as
more shortcomings and gaps in the policy become evident with each
passing day.

That the SEZ approvals in some cases are becoming real-estate scams has
become evident from the emerging evidence of a secondary market in such
zones. According to reports, the zones that have been approved are on
sale at a premium.

The mind-boggling rush of applicants and the number of approvals itself
is sufficient to raise doubts about the intent and purpose of the
developers. Many of the promoters, including politically well-connected
business houses, were sanctioned land to set up SEZs at amazing speed.
However, with SEZs becoming the zones of contention, efforts seem to be
on to restrict the number of such zones by inserting new rules and clauses.

For instance, the validity period of in-principle SEZ approvals has been
reduced from three years to one year.

According to new rules announced by the Centre, developers of SEZs will
have to rehabilitate displaced farmers and landless farm workers.
Moreover, they may have to get the approval of local authorities such as
the Gram Sabha for starting their projects.

It has been notified that the final approval from the Government will
come only after the developers obtain a nod from local authorities.

NEED FOR A FRESH LOOK


Though it may appear too late, considering the serious flaws and
shortcomings that have come to the fore, the Government would do well to
take a fresh look at its SEZ policy. The Prime Minister, Dr Manmohan
Singh, has already indicated that the Government would not hesitate to
correct itself if it had erred in the SEZ policy. What is needed,
however, is a complete recast of the policy and not just a few corrections.

SEZs may have had some rationale some 15-20 years ago. But in today's
India, there are no such compulsions to go for special enclaves at a
time when exports are growing at a healthy rate, the economy is on a
song and foreign exchange reserves are poised to cross the $200-billion
mark.

Our real concern now should be about the growing regional disparities,
the impoverishment of the countryside and the fast-widening rural-urban
divide.

At the most, the country may need 20-30 large integrated zones, each
with several 100 square km area, away from major cities and towns that
are strategically located.

They should be provided with only a few select fiscal incentives but
should be well connected to cities and ports by highways, rail and air.
Moreover, it should be ensured that such zones help create externalities
or economies of scale for the country's hinterland aimed at balanced
regional development.
http://www.thehindubusinessline.com/2007/03/31/stories/2007033100130800.htm

EGOM to discuss SEZ issues next week

Saturday March 31 2007 01:54 IST
CHENNAI: An empowered group of ministers headed by External Affairs
Minister Pranab Mukherjee is expected to meet next week to discuss and
analyse issues of special economic zones and relaxation norms for such
SEZs, Union Minister of Communications and IT Dayanidhi Maran said here
on Friday.

He was speaking to media persons on the sidelines of the launch of a
joint venture between Reliable Freight Forwarders Pvt Ltd and Hong
Kong-based Kerry Logistics Network.

Maran was hopeful that SEZs which had been approved in Tamil Nadu but
were put on hold due to the controversy over land acquisition in various
states would be given the green signal as most SEZs in the state were
being set up on land belonging to the Small Industries Promotion
Corporation of Tamil Nadu (SIPCOT).

He added that companies that had shown interest in setting up their
units in these SEZs were upset at the delay. "We are the ones who will
suffer as we have been successful with SEZs. Also we have no issues with
land here," he said.

Maran said there were about 20 SEZs in the state and most of them could
not make progress on work due to these problems. Maran also hoped that
sizes of SEZs would not only be 1,000 or 500 acres but also as small as
200 or 300 acres. He also invited investors to not only invest in real
estate but the IT industry.

The new JV company known as the Kerry Reliable Logistics Pvt Ltd in
India will offer comprehensive logistics support in Tamil Nadu. The
Kerry group also has plans for new projects to be implemented in the
country.

Managing Director, Reliable Freight Forwarders, J Antony Sekar, said the
company had its network spread in all important locations in the country.
http://www.newindpress.com/NewsItems.asp?ID=IEB20070330153243&Title=Business&rLink=0

SEZs to use just 0.1% of total farm land: govt

ARUN S
Posted online: Saturday, March 31, 2007 at 0000 hours IST


NEW DELHI, MAR 30 : The special economic zones cleared so far will use
just 0.1% of India's total farm land, says the government. The country
has a total 15,34,166 sq km of agriculture land and the 396 approved
SEZs will occupy just 1,750 sq km.
Of the total land mass, the SEZ territory works out to just 0.06%. The
total land area of India is 29,73,190 sq km, according to government data.


To allay fears that fertile land will be used for setting up SEZs
imperiling farmers, the government makes a comparison with the Hainan
project in China. This SEZ is spread over 34,000 sq km. The Shenzen SEZ
has come up over 327 sq km and the Xiamen SEZ occupies 131 sq km.

The Centre has been put to sword by various quarters which allege that
agriculture land is being acquired for SEZs. With this data, the
government hopes to drive home its point that the impact of SEZs on the
country's farm land will be negligible.The total area for the 234 SEZs
having formal approval is 350 sq km (including 67 sq km for the 63
notified SEZs), while the total land area proposed to be used for 162
SEZs with approval in principle (where land is yet to be acquired) is
1,400 sq km, according to the commerce ministry. The total agriculture
land is 51.6% of the country's total land area and the total
non-agriculture area is 14,39,204 sq km.

The ministry says, of the 350 sq km to be used by the 234 SEZs with
formal approvals, around 178 sq km are already with State Industrial
Development Corporations.

Rare Earth
• The country has a total
15,34,166 sq km of agriculture land and the 396 approved SEZs will
occupy just 1,750 sq km
• Of the total land mass, the SEZ territory works out to just 0.06%. The
total land area of India is 29,73,190 sq km

Currently, 1,016 businesses are operating out of SEZs, providing direct
employment to more than 1.79 lakh people, of which about 40% are women,
says the government. In the 63 notified SEZs set up after February 2006,
investments worth Rs 13,435 crore have been made and 18,457 people
directly.

The commerce ministry projects that by December 2009, the 63 notified
SEZs will draw investments worth Rs 53,561 crore and provide employment
to 15,75,452 more people. If the 234 SEZs with formal approvals become
operational, they will bring in investments worth Rs 3,00,000 crore and
create an additional 4 million jobs.

The ministry says, of the 234 formal approvals, 80 were for SEZs in
sectors like textiles & apparels, leather footwear, automobile
components and engineering, involving labour-intensive manufacturing. In
2005-2006, the total exports from SEZs that are already operating were
$5.078 billion -- a 24.71% growth over the previous year's $4 billion.

The government projects that exports by the 19 old SEZs and the 63 newly
notified ones in 2007-08 will be worth Rs 67,300 crore and the figure
will cross Rs 100,000-crore mark by 2008-09.

http://www.financialexpress.com/fe_full_story.php?content_id=159575

Thursday, March 29, 2007

The SEZ relay: Tax hurdles

[ FRIDAY, MARCH 30, 2007 12:00:00 AM]

Vikram Bapat & Shilpa Shanbha

The Special Economic Zone (SEZ) is no less than a phenomenon that hit
India with battering impact in these last few months. As the baton
passes back and forth there is yet one runner waiting patiently for the
baton to pass to him—the taxman.

The insertion of Section 10AA in the Income Tax Act, 1961 ('Act'), has
effectively forced a clearly reluctant finance ministry to run the race.
Whereas the February 28 annual fair ushers in most of the tax offering
to the public at large through the Finance Acts, section 10AA originates
from the SEZ Act, 2005, thus forcing the finance ministry in the relay
and out of its monopoly.

Once the current controversial dust settles, we hope that India is truly
poised to set up world class infrastructure to usher an era of sustained
exponential growth. That's when the entrepreneurs or units will set up
and then will start the inevitable battle with the taxman.

Quantum of deduction

In 2000, Finance Minister Yashwant Sinha had proposed to delete sections
10A and 10B from the Act. Pandemonium broke loose. Eventually public
opinion prevailed and the sections were reinstated in the statute book
in a new avatar. This version raised the first controversy that—lo and
behold!—is back to haunt us in section 10AA.

To elucidate, the deduction is to be computed in the manner provided in
the section. The formula stipulated is that the profit derived from the
export of articles, things or services (including computer software)
shall be the amount which bears to the profits of the business of the
undertaking, being the unit, the same proportion as the export turnover
in respect of such articles or things or services bears to the total
turnover of the assessee.

This raises the first major controversy. How will an entrepreneur or a
company having multiple units or units with diverse activities, one of
which is a unit in an SEZ, calculate the available deduction? The
application of the formula will result in a reduction of the available
deduction because of the ratio between export turnover and total turnover.

Whereas, export turnover is only of the SEZ unit as the numerator, the
denominator is the total turnover of all units of the assessee in the
aggregate. This is also inconsistent to the extent that whereas the
profit is of a specific unit, basis of allocation (particularly the
denominator) is for the business as a whole.


You may recall that this anomaly also existed in the re-introduced
section 10A/10B but was promptly amended by specifying that the total
turnover will also be only of the singular unit. This amendment has not
happened thus far in section 10AA—until then it will be anybody's guess.
Let's move on.

Migration of units

Existing IT/ITeS units are looking to SEZ to bridge the fiscal gap that
is staring in their face effective March 2009 (rumours of an extension
notwithstanding). Migration is the buzzword for the business but is
taboo for the authorities. It won't be long before our abominable taxman
picks it up either. But do they have a case?

The first interesting departure from the section 10A/10B norm that was
that certain restrictive conditions don't find a place in section 10AA.
There were no conditions stipulated that units should not be formed by
the splitting up or reconstruction of a business already in existence.

Neither was there a condition that the unit should not be formed by the
transfer to a new business of machinery or plant previously used subject
to a cap of 20% of the value. Let us put the second condition at rest.
If it is not in the tax law it is very clear from the SEZ rules itself
that no unit can be registered as an SEZ unit if it proposes any
machinery or plant previously used in any area outside of an SEZ.

No limits either. The tax law therefore is immaterial. The critical
difference now is the question—can the unit transfer its employees from
an existing unit to a new unit in an SEZ. There is no apparent
restriction to this whatsoever at least in the SEZ law.
Conclusion—migration with substantial expansion in an SEZ would have
been a distinct possibility—until Budget 2007.

It is now proposed that the restrictive conditions of section 10A/10B be
inserted in section 10AA as well. Should this become law (and in all
likelihood it will be) the question of migration perhaps is finally
nipped in the bud and is likely to be a non starter. Perhaps, just as
well. This is one step towards achieving the primary goal—incremental
economic growth and not merely shifting of existing economic resources.

Export from an SEZ

The dichotomy between business realities and revenue collection may just
come to the fore in the provisions of section 10AA that deal with what
can be construed as "export turnover" for the purpose of the section.
There are some differences of opinion even in the current section 10A
regime but section 10AA holds greater potential for the taxman to turn
yet another step away from business reality. Here's why.

"Export Turnover" is defined in the Act to mean the consideration in
respect of export by the undertaking, being the unit of articles or
things or services received in, or brought into, India by the assessee
but does not include certain charges or expenses. Seems quite straight
forward.
However, there is yet another definition; "Export in relation to the
SEZ" has been defined to mean taking goods or providing services out of
India from an SEZ by land, sea, air or by any other mode, whether
physical or otherwise. Interestingly, this definition is not referred to
or does not find place anywhere in the rest of the section.

What, therefore, is its significance? The significance may be understood
in the context of sub-contracting by an SEZ unit that is extensively
permitted by the SEZ Act and Rules. Take this example.

What if an SEZ unit manufactures a product and sends it out for
specialised packing to a third party contractor for onward export on
behalf and on account of the SEZ. Would the letter of the law require
that the goods be necessarily sent back to the SEZ because of the "from
the SEZ" condition? From a business perspective, it would be illogical
and uneconomical for the packed products to be sent back to the SEZ unit
for onward export just because the tax law says so.

This example is by no means the end of all. As units start taking shape,
many more issues will be raked up by the taxman particularly after
Budget 2007 amendments see the light of day. We may have just one point
to put forward our case.

Section 10AA takes birth from the SEZ Act and hence it stands to reason
that as long as the units undertake "authorised operations" as laid down
in the SEZ Act, there should be no reason why the taxman should deny a
legitimate tax benefit. It fact, there is every reason for the tax
authorities to assume good faith as soon as the authenticity of the SEZ
registration is proved. Otherwise, this may result in a miscarriage of
justice.

(Mr Bapat is associate director & Ms Shanbha is associate,
PricewaterhouseCoopers)
http://economictimes.indiatimes.com/News/Economy/Policy/The_SEZ_relay_Tax_hurdles/articleshow/msid-1830254,curpg-3.cms

HC adjourns Nandigram case by three weeks

Our Legal Correspondent

Kolkata March 26 A Division Bench of the Calcutta High Court comprising
the Chief Justice, Mr S.S. Nijjar, and Mr Justice P.C. Ghose on Monday
adjourned the Nandigram violence case for three weeks. While doing so,
the court observed that after considering the affidavits filed by 11
parties in the case, it will consider paving an appropriate order.

One of the counsel sought for further CBI investigations at Nandigram
but the court did not pass any order based on this.

The court, however, directed the CBI to keep the collected evidence
reserved in a sealed cover, to be used when the court requires it.

Another advocate sought the court's order directing the State Government
to produce the suggestions made by the Centre to the State on the
Nandigram situation.

Earlier, on March 15, the court on its own, following the public
interest litigation, directed the CBI to investigate the Nandigram
massacre and also directed the State Government to file an affidavit
stating why such an incident happened.

On March 22, the CBI filed the report related to their investigations to
the court.

http://www.thehindubusinessline.com/2007/03/27/stories/2007032702051100.htm

SEZs in a flux

SEZs in a flux


As a topic, SEZ (Special Economic Zone) has turned out to be a knotty
issue. The Chinese model has `land'ed itself in trouble closer home. So
much so, the Commerce Ministry is hurriedly considering changes to the
SEZ Rules in the aftermath of Nandigram tragedy. And, in all
earnestness, http://commerce.nic.in offers a chat facility on SEZ,
`every working day' for an hour from 5 p.m.

To be equipped for an intelligent discussion on SEZ, take the help of
Treatise on Special Economic Zones, by Kanu Doshi and Yogesh Ashar, from
Snow White Publications Pvt Ltd (www.swpindia.com).

The Foreword by Nayan Patel, President of Indian Merchants' Chamber,
concedes that the SEZ policy has stirred up `certain vexed issues that
need to be addressed'. Such as: `the demand to regulate use of farm land
for industrial purposes, valuation of land under acquisition,
compensation to farmers, role of State in all of these, and so on'.

The preface notes that concessions and tax exemptions for SEZs `have
lured businessmen in India and even from across the world to set up
manufacturing hubs in India involving massive investments'. The authors
advise Indian industry `to summon managerial skills of the highest
standards for successful SEZ forays'.

While explaining the `multi-layer system' for acquisition of land for
SEZ, the authors cite from recent news and judgments. One is about
Commerce Minister Kamal Nath's exhortation to industry (expressed in a
September 2006 interview) to accept that agriculture land cannot be
acquired for SEZ purposes. "In his view, the SEZ Act is not meant to be
a real estate legislation. At the same time, he also stated that
imaginary concerns should not hurt employment generation in the country.
He also averred that land acquisitions should be between a willing
seller and willing buyer." Alas, willingness can often be engineered.

The book devotes separate chapters to the establishment of SEZ,
constitution of Board of Approval, special fiscal provisions for SEZs,
modifications to the Income-Tax Act, forex requirements and monitoring,
and circulars/notifications. Part 2 of the book is on State government
policies relating to SEZs.

Appendices contain valuable information, and text of key decisions. The
Gujarat High Court's verdict (unreported) in Shah Kantilal Depar vs
Reliance Infrastructure Ltd is one such. The petitioners, in this case,
were `residents of various villages of District Jamnagar', and the
target of their grievance was Reliance's new refinery.

The court dismissed the PIL (public interest litigation) holding that
there was no loss to the aggrieved agriculturists `since only 12 per
cent of the total land would be affected'. The court also upheld the
Report of Experts that the acquired land were `not fertile lands', and
that delaying the project would cause `huge financial loss for the
company and loss of huge benefits to be accrued to the Revenue and loss
of job opportunities to the unemployed... '

Topical read for leading edge professionals.


The book begins by explaining each of the sections in the SEZ Act, 2005.
For instance, the word `services' is elaborately dealt with. Section
2(z) defines `services' as tradable services which are covered under the
GATS (General Agreement on Trade in Services) and prescribed by the
Central Government, and which earn foreign exchange. Section 2(m)
defines `export' as taking goods or providing services out of India,
from SEZ. List of services, as in Rule 76 of the SEZ Rules, 2006, and
the definition of `service' as found in precedents and other legislation
have been painstakingly compiled, to provide the context.
http://www.thehindubusinessline.com/2007/03/29/stories/2007032900480900.htm

Government cautious on SEZs

Special Correspondent

Says it is up to the promoters to acquire the land and then seek approval

--------------------------------------------------------------------------------

Priority for SEZs coming up in backward areas
They are likely to generate 10 lakh jobs
--------------------------------------------------------------------------------


BANGALORE: The Karnataka Government is cautious on granting approval to
Special Economic Zones obviously after what has happened in West Bengal.

Minister for Industries Katta Subramanya Naidu replying to questions of
N.H. Shivashankar Reddy and others during Question Hour in the
Legislative Assembly on Monday said the State Government would not be a
party to acquiring land for the SEZs.

It was for the promoters of SEZs to acquire the land and approach the
Government for approval. This meant that the promoters had to pay market
price to the landowners.

He said approval for new SEZs had been kept on hold by the Centre for
the last six months pending report of the Group of Ministers (GoM).
There was lacuna in the rules framed by the Centre on SEZs, which
permitted real estate development.

The Minister said the State Government was keen on forming SEZs on its
own, particularly in Gulbarga and Bidar.

Among the 29 SEZs approved for the State so far, the Karnataka
Industrial Area Development Board had obtained permission for one SEZ
for the IT sector on 203 hectares of land with an investment of Rs. 49
crore, another SEZ for the automotive sector to come up at Shimoga on
169 hectares of land and with an investment of Rs. 38.61 crore and a
third for the food processing sector in Hassan on 15.73 hectares of land
with an investment of Rs. 534.58 crore. He said three of the 29 SEZs
approved so far had started functioning. Of the 29 SEZs, 19 were in
Bangalore Urban District, two each in Mangalore and Bangalore Rural
district, three in Hassan and one each in Shimoga, Belgaum and Mysore.

The anticipated investment in the 29 SEZs was over Rs. 14,000 crore of
which the domestic investment alone was Rs. 13,300 crore.

Thus, the foreign direct investment in the SEZs was not more than 10 per
cent of the total anticipated investments.

The SEZs were expected to provide job opportunities to nearly 10 lakh
people.

To another question of R. Roshan Baig, the Minister said the KIADB had
sanctioned 1,183 acres of land to the multinational companies in the
industrially developed areas adjoining Bangalore.

Water scarcity


Earlier, Deputy Chief Minister B.S. Yediyurappa, said the Government
would release adequate funds to mitigate the acute water scarcity in
several parts of the State.

Funds would not be a constraint in providing drinking water supply, Mr.
Yediyurappa added.

http://www.hindu.com/2007/03/27/stories/2007032703010300.htm

ADB: tax sops for SEZs unnecessary

Special Correspondent


NEW DELHI: The Asian Development Bank (ADB) on Tuesday joined ranks with
the critics of Special Economic Zones (SEZs), saying that the tax
incentives being offered by the Government to such developers and the
units in these zones were "unnecessary".

Noting that such tax breaks were "unnecessary," the bank's report,
"Asian Development Outlook 2007," said: "SEZ tax inducements are
expensive, and come at a time when the Government is struggling to
provide adequate infrastructure in the wider economy".

According to estimates by the National Institute of Public Finance and
Policy (NIPFP), the Government is expected to lose about Rs. 1,00,000
crore in revenue on account of fiscal concessions to SEZs.

The ADB report pointed out that the special tax incentives would open
loopholes for tax evasion and undermine investments in firms located
outside such zones, as these units would suffer from "worse
infrastructure and higher taxes."

Instead, better infrastructure and more bureaucratic efficiency in SEZs
would be sufficient to stimulate investment, the report said.

http://www.hindu.com/2007/03/28/stories/2007032819961800.htm

Opposition to SEZ pays dividends for PWP, Sena in Raigad

Meena Menon

Tie-up between Peasants and Workers Party and Shiv Sena led to a
thumping victory in the Zilla Parishad polls in Maharashtra

--------------------------------------------------------------------------------

``PWP has a long tradition of grass roots work in the area''
Congress wins 6 seats compared to 5 last time
--------------------------------------------------------------------------------


MUMBAI: The opposition to proposed Special Economic Zones (SEZs) and
industries, including the Reliance Group-promoted Mumbai Special
Economic Zone (MSEZ) in Raigad district, has paid political dividends
for the two parties in the area who tied up for the recent elections to
zilla parishads.

While load shedding and farmers' suicides did not prevent the Congress
from performing well in the State, in Raigad, a tie-up between the
Peasants and Workers Party (PWP) and the Shiv Sena led to a thumping
victory for them.

Most politicians do not deny the impact of grass roots campaign with the
farmers and fisherfolk who stand to lose if the SEZs are set up. Senior
PWP leader N.D. Patil, who led a rasta roko last Friday against the SEZs
in Raigad district, said the poll results reflected people's anger on
the issue.

In a region where over 70 per cent of the people are small farmers or
fisherfolk, agriculture is the mainstay. The land being acquired for the
SEZ is used for paddy cultivation. The PWP has a long tradition of grass
roots work in the area, said the local MLA, Vivek Patil. ``We have been
working with the people for a long time and we have stood for certain
values in the district," he said. Sena leaders such as Manohar Joshi and
Ramdas Kadam extended their support to the agitation.

Although A. R. Antulay, Congress MP and a Union Minister who is from
Raigad campaigned for his party during these local elections, it did not
make much of a dent. Mr. Patil said the Congress had not really been
sensitive to people's issues and they were too scared of losing out on
contracts and power if they did. They have never been on the side of the
farmers, he said. The other factor against the Congress was that it had
never explained what the SEZs meant and how people could benefit.

This aspect has definitely worked to the PWP and Sena's advantage. The
PWP gained by winning 26 seats and Sena with 16, of the total 61 in the
ZP. Earlier too, the PWP and the Shiv Sena worked together for about two
years to run the Zilla Parishad. The only issue they differed on was
``Hindutva,'' said Mr. Patil, adding that the tie-up did not affect his
party's secular image up. There were more important battles to be
fought, he felt.

Mr. Patil says that both the PWP and the Sena are cadre-based parties
and close to people. The Congress won only six seats (it had five last
time) and some wins were due to booth capturing and bogus voting, he
alleged. At Rave, there was firing too after complaints of booth
capturing. This is also the constituency of Maharashtra Minister of
State for Public Works Ravishet Patil of the Congress. Desperate to show
solidarity, his son Vaikunth, a newly elected zilla parishad member,
took part in the rasta roko last week.

Unlike other members of his party, Shrikant Patil from Vashi in Pen
taluka of Raigad district is one of the few Congressmen to have won the
Zilla Parishad elections and caused an upset of sorts in his area.

This former sarpanch of Vashi village has been opposing the SEZ. ``I too
am a small farmer with four acres and I am strongly opposed to the SEZ,"
he said.

His opponent Anant Patil, who heads the committee of 24 villages opposed
to the SEZ from Pen taluka, said overall, the Sena -PWP did benefit from
the anti SEZ sentiments and he lost only by a few votes.

Youth leaders of the party such as Dhairyashail Patil, PWP district
secretary, said unless the SEZ issue was fought in the political arena,
the people would not win. The anti-SEZ feelings were reflected in the
elections but not to the desired extent, he pointed out. He said the
anti-SEZ sentiment was very strong in the Hamrapur area but the party
lost from there. However, the Congress is probably feeling the heat from
the protests as last Friday, during the rasta roko, Chief Minister
Vilasrao Deshmukh made statements in the Upper House that the Government
would not come in between the farmers and the Government in land
acquisition issues. However, the people are demanding that land
acquisition notices be withdrawn.

Official sources said land acquisition proceedings were not stalled and
the hearings were still underway.

http://www.hindu.com/2007/03/28/stories/2007032800911400.htm

We will develop SEZ in our own way: Chidambaram

Posted online: Friday, March 30, 2007 at 0000 hours IST


SHENZHEN (CHINA), MAR 29 : Amid controversies over the setting up of
China-style Special Economic Zones (SEZ), India on Thursday said the
government recognised SEZs as an important tool in furthering
industrialisation but will implement the concept in its "own way".
"We recognise that SEZs are a useful tool for industrial development,
especially in areas where infrastructure is lacking. Where
infrastructure already exist, it is perhaps not necessary to create
SEZs," India's finance minister P Chidambaram said after inaugurating
the first full-fledged branch of Bank of India here.

The one-time fishing village of Shenzhen is the first the SEZ in China.
It was China's first major experiment with capitalism after late Chinese
paramount leader Deng Xiaoping landmark visit to the southern Guangdong
province in 1986. The Shenzhen SEZ was originally established in 1979
due to its proximity to Hong Kong, then a prosperous British colony. The
SEZ was created to be an experimental ground of capitalism in "socialism
with Chinese characteristics".

Chidambaram noted that Chinese businesses were already routing 300
million US dollars worth of business through BOI in countries like
Singapore and expressed confidence that with the establishment of a
full-fledged bank in Shenzhen, Chinese businesses would opt to deal with
Indian banks for their requirements in India.

Indian ambassador to China, Nirupama Rao noted that BOI is the only
Indian bank to have two offices in China -- Shenzhen and in Beijing,
where it has a Representative Office. Pointing out that India will soon
open a second Consulate General in Guangzhou, capital of the southern
Guangdong Province, she hoped that cities like Shenzhen would play a
greater role in fostering stronger bilateral trade between India and China.

BOI chairman andMD M Balachandran said it was a privilege for the bank
to commence operations in Shenzhen and contribute to enhanced bilateral
trade and economic cooperation.


http://www.financialexpress.com/fe_full_story.php?content_id=159459

Industry seeks SEZ-like tax sops for steel

DATELINE

NEW DELHI, MAR 27: Industry body CII has sought higher banking exposure
norms for lending to steel projects and infrastructure status to the
steel industry, besides tax sops on par with special economic zones to
boost the sector.
"The government should consider steel industry as a priority industry
and provide appropriate fiscal incentives which are provided to other
priority sector industries," CII said in a paper submitted to the
government.

The industry body demanded enhancing sectoral exposure limits of banks
and financial institutions from 10 and 15 % to 25 %, besides
infrastructure status to the steel industry similar to power sector.

It also suggested setting up a Special Purpose Vehicle -Steel Finance
Corporation of India (SFCI) as a public-private partnership entity for
the sector. CII suggested that integrated steel plants with a capacity
of minimum two million tonnes be allowed to determine their own rate of
depreciation while duty on project imports for greenfield and brownfield
expansions for steel projects be brought down to zero in the next 15
years.The chamber sought relaxations on restrictions for end use of
External Commercial Borrowings for steel firms to enable them retire
rupee debt and raise project finance.

"Interest limit on raising ECBs may be relaxed to at least LIBOR plus
5.5 on floating rate from the current rate of LIBOR 5.5 per annum," CII
suggested in the paper.

The industry body also demanded that securitisation of export
receivables be made free from all restrictions.

"Main EPC contractor for setting up steel plant should get benefits
available to a developer as provided in the SEZ Act," the industry body
demanded strongly.


http://www.financialexpress.com/fe_archive_full_story.php?content_id=159228

Essar now eyes multi-product SEZ at Hazira

HARIT MEHTA

TIMES NEWS NETWORK[ MONDAY, MARCH 26, 2007 12:35:48 AM]

AHMEDABAD: After steel and subsequently engineering, the Essar group now
plans to convert its upcoming special economic zone (SEZ) at Hazira into
a multi-product SEZ. The group has recently filed an application with
the state government and has started the process of acquiring additional
land for the project. This means the group will have two multi-product
SEZs in Gujarat.

Originally, the group had planned to set up a steel SEZ at Hazira.
Subsequently, it sought permission to convert it into an engineering
SEZ. The engineering SEZ, which was likely to come up on 267 hectares,
has been cleared by the Board of Approvals.

Essar SEZ Hazira had signed an agreement with the state government
during the recently concluded Vibrant Gujarat Global Investors' Summit
to develop a steel plant and a deep-water port and allied facilities at
Surat. The company pledged total investments of Rs 12,750 crore.

State government sources said the company wants to further convert it
into a multi-product SEZ. "Essar now wants to develop a multi-product
SEZ instead of an engineering zone," said a senior state department
official. When contacted the company declined to comment.The group has
already got a BOA approval for its multi-product SEZ at Jamnagar, which
will come up over 1,000 hectares. The Hazira SEZ will be almost as big
in terms of area as its Jamnagar multi-product SEZ.

The company proposes to augment its steel manufacturing capacity to nine
million tonnes at Hazira. Sources say the company is talking to
automobile major Nissan and component manufacturer Manineto for setting
up facilities in the Hazira SEZ.

Besides, the group has also got the approval for power SEZ at Suvali in
Surat. The group also plans to expand its cargo handling capacity at
Hazira to 35 million tonnes in order to cater to the increased
requirement of industry.


http://economictimes.indiatimes.com/News/Economy/Infrastructure/Essar_now_eyes_multi-product_SEZ_at_Hazira/articleshow/1807071.cms

States must redraw master plans for SEZs

MAYUR SHEKHAR JHA & RAJAT GUHA

TIMES NEWS NETWORK[ TUESDAY, MARCH 27, 2007 01:43:10 AM]

NEW DELHI: States will have to amend their respective master plans to
allow SEZs to take off. The rural development ministry has proposed that
the area notified for SEZs or large-scale industrial projects in a
state's master plan should not touch existing residential/dwelling units
of villagers.

The proposal may be included as a mandatory clause in the
resettlement-and-rehabilitation (R&R) policy being finalised by the
rural development ministry. This comes in the wake of the Nandigram
episode, which government sources say could have been avoided if the
West Bengal government had adhered to the R&R policy. The matter is
expected to come up for discussion at the next board of approvals (BoA)
meet.

"States currently do not have to do zoning of land at such a micro
level, and it is based on larger clusters. If the new policy is
implemented, it will help address the issue of resettlement," a senior
government official said.

Sources say the ministry's proposal is based on a factual comparison
between SEZ projects in Haryana and West Bengal. A survey by the R&R
department of Haryana State Industrial & Infrastructure Development Corp
says farmers/landlords in the Jhajjar area had no issues selling off
agricultural land as long as they were not asked to leave their houses.
On the other hand, in Nandigram, a large chunk of land comprised
villagers' dwelling units. "While farmers seem convinced of better
monetary rewards and employment guarantee while selling farm land, the
idea of resettlement looks like a taboo," the official said.

The proposal will also check speculation on properties near upcoming
SEZs. "Property developers tend to jack up prices or plots falling near
SEZs," the official said.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/States_must_redraw_master_plans_for_SEZs/articleshow/1813017.cms

India to develop SEZ in its own way: Chidambaram

PTI[ THURSDAY, MARCH 29, 2007 03:10:14 PM]

Shenzhen: Amid controversy over the setting up of China-style Special
Economic Zones (SEZ), India today said the government recognised SEZs as
"an useful tool" in furthering industrialisation but will implement the
concept in its "own way".
"We recognise that SEZs are a useful tool for industrial development,
especially in areas where infrastructure is lacking. Where
infrastructure already exist, it is perhaps not necessary to create
SEZs," India's Finance Minister P Chidambaram said after inaugurating
the first full-fledged branch of Bank of India here.
The one-time fishing village of Shenzhen is the first the SEZ in China.
It was China's first major experiment with capitalism after late Chinese
paramount leader Deng Xiaoping landmark visit to the southern Guangdong
province in 1986.
"Where infrastructure is not existent, a SEZ will be a useful instrument
to attract investors to build the infrastructure, to take advantage of
the concessions offered by the government and to industrialise that
area," Chidambaram said.
"We recognise the validity of that principle and we are trying to
implement it in our own way," the Finance Minister said.
The Shenzhen SEZ was originally established in 1979 due to its proximity
to Hong Kong, then a prosperous British colony.
The SEZ was created to be an experimental ground of capitalism in
"socialism with Chinese characteristics". The location was chosen to
attract industrial investments from Hong Kong since the two places share
the same language and culture, local officials said.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/India_to_develop_SEZ_in_its_own_way_FM/articleshow/1828856.cms

Maha Mumbai SEZ may be cut to size

x
AMITI SEN & GIRISH KUBER

TIMES NEWS NETWORK[ THURSDAY, MARCH 29, 2007 01:14:56 AM]


NEW DELHI/MUMBAI: The government may ask Reliance Industries to scale
down the size of its proposed multi-product Maha Mumbai SEZ from 10,000
hectares to 5,000 hectares to avoid dislodging farmers and villagers
unwilling to relocate. The decision is expected to be taken at the next
meeting of the empowered group of ministers (eGoM) on SEZs.

With protests from farmer groups, political parties and small businesses
intensifying in the state, the government's proposal could be seen as an
attempt to prevent a repeat of the violence in West Bengal's Nandigram.

"If Reliance scales down its operations by half in Maha Mumbai, the
sensitive areas could be excluded from the zone and peace restored," the
official said. The Board of Approval for SEZs in an earlier meeting in
August last year had observed that land planned for building the Maha
Mumbai SEZ was much more than required.

With the situation hotting up, the EGoM headed by foreign minister
Pranab Mukherjee is expected to ask Reliance to reduce the size of the
SEZ, sources said. The date for the EGoM, which will also decide on the
future course of the SEZ policy, has not yet been firmed up. It is
widely speculated that the meeting will take place only after the UP
assembly elections are over.

There seem to be two compelling reasons for the Centre to revisit the
issue. The Board of Approvals had earlier washed its hands off the
issue. The Board categorically stated that it had indicated to the
Maharashtra government to review the size of RIL's SEZ after it received
a number of representations.

"However, the Maharashtra government has approved acquisition of over
10,000 hectares and that land being a state subject, it is the
prerogative of the state government concerned," the board had noted in
its meeting, squarely blaming the Congress-led Maharashtra government.

Politically, it was suicidal for Congress as it gave an impression that
though the Board was against RIL's mega-SEZ, the Vilasrao Deshmukh
government had facilitated the project. Ever since the state government
began facing flak for its SEZ-friendly image, the Congress had, on
sensing public mood, dispatched a fact-finding committee on Wednesday to
meet the SEZ-affected people in Raigad district.

Another reason, according to highly placed sources, is the opposition to
the company in some of the villages. Of the 45 villages from the three
talukas of Pen, Uran and Panvel to be acquired, the company was finding
it particularly difficult to deal with 20 from Uran taluka.
These politically-active villages have been leading the campaign against
the SEZ. It was here that the Congress faced humiliating defeat in the
recent zilla parishad elections. The volatile political situation and
violent protests had forced the company to think of redrawing its SEZ
plan. "The company may delete 20 villages from Uran from its SEZ," a
high-level political functionary had recently told ET.

Last week, when hundreds of agitators, mostly farmers, blocked roads in
Raigad district in protest against the Maha Mumbai SEZ, chief minister
Vilasrao Desmukh promised that the government would not interfere in the
land acquisition process in Maharashtra.

The protestors, however, are continuing to keep up the pressure on the
state for withdrawing land acquisition notices issued to people in 45
villages falling in the Maha Mumbai SEZ. Apart from farmers, there are
businesses located in the zone, many servicing JNPT, who have refused to
be relocated. The protestors have planned another march on April 5 in
Mumbai.

Reliance has received an in-principle approval for the Maha Mumbai SEZ.
A formal approval is given by the BoA only when all land-related
controversies are put to rest and the developer is in possession of the
entire land. Meanwhile, the Reliance group has come up with its own
relief and rehabilitation package for those to be displaced by the Maha
Mumbai SEZ.
http://economictimes.indiatimes.com/News/Economy/Infrastructure/Maha_Mumbai_SEZ_may_be_cut_to_size/articleshow/msid-1825502,curpg-2.cms

No SEZ rollback: Buddha

BIDYUT ROY
Posted online: Thursday, March 29, 2007 at 0150 hours IST




KOLKATA, MAR 28: Making his first public appearance after the police
firing at Nandigram on March 14, chief minister Buddhadeb Bhattacharjee
was back in form, stressing that there was no question of going back on
plans for a chemical hub, the issue that had aroused violent opposition
at Nandigram.
At the same time, Bhattacharjee said the hub would not come up at
Nandigram, but at an alternative location, as he sought to explain that
his vision of industrialisation would not lead to jobless growth as
globalisation has done, according to its critics.



"Today, I spoke to Delhi. I have told them to let us know the latest
position since we have a pact with Indian Oil Corp [for the chemical
hub]," Bhattacharjee told the students and youth wing of the CPI(M).

"We want the chemical hub," he stressed. Once Delhi gives the final
picture, "we will locate an alternative within seven days," he told the
crowd of around 10,000 at an indoor stadium.

The state had planned to acquire 10,000 acres in the area for a special
economic zone (SEZ) that would be part of a chemical hub cleared by the
Union government.

Bhattacharjee said the state government had wanted the chemical hub to
come up at Nandigram, and to build a bridge over the River Haldi to
connect the area with Haldia.

"We have one Haldia. We wanted to build another Haldia," he said,
referring to the port town that is home to major petrochemical-based
plants of Japan's Mitsubishi Chemical Corp, Haldia Petrochemicals Ltd
and Indian Oil Corp, apart from other industries.

"But the people of Nandigram did not accept our plans," Bhattacharjee
said. "At first, we had decided that the SEZ would not come up if the
people there do not want it. Now, the government has decided not to
build the SEZ at Nandigram."

Bhattacharjee said everybody knows the incident of March 14. He stressed
that he does not want bloodshed.

"I, on behalf of the government, accept responsibility for what
happened," Bhattacharjee said.

He said, "To me, what matters is that human beings died. Their party
affiliation is not important."

He urged the opposition parties to remember that the Leftists are also
human beings. "Do not kill them," he said, in reference to the deaths of
several CPI(M) workers at the hands of those opposed to the SEZ at
Nandigram.

Without naming any opposition leader or party, Bhattacharjee used the
platform to lash out at those opposed to his industrialisation vision.

"Please do not ruin the state," he said. "Your actions are sending the
wrong signals to the rest of the country and the world."

Bhattacharjee said he and his team had gone to the other parts of India
as well as to other countries to tell people that West Bengal needs
investments.

"Today, the state has turned around and has created an investment climate.

In this year alone, we have investment proposals for Rs 78,000 crore,"
the chief minister said.

Because of the government's drive, he said, the youth are again
optimistic about getting jobs.

"Should we not go forward? The Opposition wants us to halt, but I say
West Bengal will overcome all hurdles to become No. 1 in industry,"
Bhattacharjee said, once again to loud clapping.

http://www.financialexpress.com/fe_full_story.php?content_id=159382

Monday, March 26, 2007

New SEZs may not have golf courses, amusement parks

New SEZs may not have golf courses, amusement parks
RAJAT GUHA & SUBHASH NARAYAN

TIMES NEWS NETWORK[ MONDAY, MARCH 26, 2007 12:34:26 AM]

NEW DELHI: The government is considering framing new rules for housing
and recreational activities in upcoming SEZs. Large-scale recreational
activities, such as construction of golf courses and amusement parks,
may not get approval in new SEZs.

Also, only 25% of the approved housing may be allowed during the initial
phase, with the remaining construction being permitted in phases
depending upon the progress made by the SEZ developer.

The changes are likely to be incorporated in the rules for setting up
SEZs, a government official said. The rural development ministry is also
in favour of the proposal as it would limit land requirement for
projects. Due to widespread farmer unrest and violence, the government
wants to tread cautiously while allocating land for SEZs.

As per the proposal, setting up of golf courses or other recreational
facilities with large land requirement may be included in a negative
list of activities permitted in a SEZ.

The entire land acquisition for SEZs would also be undertaken by
limiting the minimum area of land for core functions and a small portion
for allied functions.

"There should be a symbiotic relationship between core and allied
functions. Construction of golf courses and other such recreational
activities are not in consonance with core functions under SEZ," the
official said.

The changes may also require an SEZ promoter to construct just 25% of
the approved housing for the project in the first phase. The approval
for the remaining construction may be given in three phases depending
upon the development of the SEZ. The changes are likely to be included
to restrict land requirement for non-core functions.

While the commerce ministry is working on the new changes, sources said
the rural development ministry may also suggest the creation of a new
authority in the new rehabilitation and resettlement policy that would
come up for Cabinet approval soon.

The proposed authority would first vet land requirements suggested by a
SEZ developer before forwarding it for approvals. Non-core activities,
such as setting up recreational facilities, may be axed at this stage.

rajat.guha@timesgroup.com


http://economictimes.indiatimes.com/News/Economy/Infrastructure/New_SEZs_may_not_have_golf_courses_amusement_parks/articleshow/1807229.cms

Essar now eyes multi-product SEZ at Hazira

Essar now eyes multi-product SEZ at Hazira
HARIT MEHTA

TIMES NEWS NETWORK[ MONDAY, MARCH 26, 2007 12:35:48 AM]

AHMEDABAD: After steel and subsequently engineering, the Essar group now
plans to convert its upcoming special economic zone (SEZ) at Hazira into
a multi-product SEZ. The group has recently filed an application with
the state government and has started the process of acquiring additional
land for the project. This means the group will have two multi-product
SEZs in Gujarat.

Originally, the group had planned to set up a steel SEZ at Hazira.
Subsequently, it sought permission to convert it into an engineering
SEZ. The engineering SEZ, which was likely to come up on 267 hectares,
has been cleared by the Board of Approvals.

Essar SEZ Hazira had signed an agreement with the state government
during the recently concluded Vibrant Gujarat Global Investors' Summit
to develop a steel plant and a deep-water port and allied facilities at
Surat. The company pledged total investments of Rs 12,750 crore.

State government sources said the company wants to further convert it
into a multi-product SEZ. "Essar now wants to develop a multi-product
SEZ instead of an engineering zone," said a senior state department
official. When contacted the company declined to comment.The group has
already got a BOA approval for its multi-product SEZ at Jamnagar, which
will come up over 1,000 hectares. The Hazira SEZ will be almost as big
in terms of area as its Jamnagar multi-product SEZ.

The company proposes to augment its steel manufacturing capacity to nine
million tonnes at Hazira. Sources say the company is talking to
automobile major Nissan and component manufacturer Manineto for setting
up facilities in the Hazira SEZ.

Besides, the group has also got the approval for power SEZ at Suvali in
Surat. The group also plans to expand its cargo handling capacity at
Hazira to 35 million tonnes in order to cater to the increased
requirement of industry.
http://economictimes.indiatimes.com/News/Economy/Infrastructure/Essar_now_eyes_multi-product_SEZ_at_Hazira/articleshow/1807071.cms

No tax sops for old machinery to SEZs

Posted online: Monday, March 26, 2007 at 0054 hours IST


NEW DELHI, MAR 25 : The finance ministry has made it tough for companies
to migrate equipment to special economic zones by disallowing tax sops
to those importing or shifting second-hand machinery from outside the SEZs.
These tax concessions are allowed under the SEZ rules of the commerce
ministry. But the North Block, which has all along maintained that SEZs
will result in revenue loss of Rs 100,000 crore in next four years, has
provided in the finance Bill that tax concessions under Section 10AA of
Income Tax Act would not be extended to any unit formed by transfer of
old machinery.

"Section 10AA (providing for tax sops) is applicable to any
undertaking...which fulfills the condition that it is not formed by
transfer to a new business of machinery or plant previously used for any
purpose," the memorandum explaining the provisions of finance Bill said.
The new provision runs contrary to SEZ rules of commerce ministry.
Moreover, it was to be effective from February 10, 2006 -- the date from
when SEZ Rules came into affect. "A unit or developer may import or
procure from DTA without payment of taxes or cess... all type of goods
including capital goods (new or second hand)...," the Rule 27 pertaining
to the SEZ Act states. Commerce ministry has been defending itself
against the charge that existing units in DTA would shift to SEZs for
tax concessions, saying this was not allowed. The Finance Bill is
emphatic on plugging the revenue leakages through shifting of units to
SEZs.

"SEZs are intended to promote new industry and invesment and not to
facilitate migration of existing industries toavail of tax concession,"
the memorandum has stated.

—PTI


http://www.financialexpress.com/fe_full_story.php?content_id=159025

Friday, March 23, 2007

Govt may plug SEZ loopholes, won’t step back

PTI[ SATURDAY, MARCH 24, 2007 02:59:42 AM]

NEW DELHI: Facing criticism on the SEZ issue, particularly after the
Nandigram police firing, Prime Minister Manmohan Singh on Friday hinted
that the government would go slow on the process due to certain
"inadequacies", but made it clear that the decision was "irreversible".

"These are decisions which are irreversible. Therefore, it is very
important that before we move, if there are any gaps in the performance,
gaps in the design and gaps in the implementation, we should halt a
little bit even though it takes time," Mr Singh said at a conclave here.

His comments came in response to a question whether government proposed
to overhaul the SEZ policy in view of strong reservations in several
quarters. But the cost of delay was going to be much less than the cost
that would arise if policies were "bulldozed" regardless of the human,
social and economic concerns, he said adding these concerns needed to be
addressed "if we want the policy to succeed in the long run".

On the issue of land acquisition for public purposes, the PM said "there
have been inadequacies in compensation and in ensuring that interests of
all stakeholders who suffer in this process are taken into account". The
government was in the process of formulating "humane, effective and just
policy" with regard to resettlement of land oustees", Mr Singh added.

Asked about PDP patron Mufti Mohd Sayeed's demand for troop reduction
from civilian areas in Jammu and Kashmir, he said the process of
discussion was under way and he would not like to conduct a dialogue
through the media. The Prime Minister, however, emphasised that
professional advice (from the Army) would be taken into account before
considering the issue.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Govt_may_plug_SEZ_loopholes_wont_step_back/articleshow/1800796.cms

Punjab, Haryana tweak SEZ policy

DINKER VASHISHT

TIMES NEWS NETWORK[ SATURDAY, MARCH 24, 2007 01:38:00 AM]

CHANDIGARH: Nandigram and Singur are far away, but the nascent
government in Punjab and the well dug-in Haryana administration are not
taking any chances. Between the two, they have around 70 SEZ projects
coming up, and the two governments are revamping their land acquirement
and farmer compensation policies.

According to Manpreet Badal, Punjab's new finance minister, the state
will soon introduce a 3% displacement allowance (on the price of the
land) as compensation for farmers whose land have been acquired for
setting up industrial units. This of course would be excess to price
paid for the land.

The Punjab government has also announced that a special committee would
be set up to examine the issue of land acquisition. This would include
the district commissioner, the legislator of the region and the chairman
of the district board. "Nobody is against industrial development, but
the farmer has to be given his due. Yes, we are keen on new industries
coming in the state, but these arrivals should be not at the cost of
farmers," Mr Badal told ET.

His counterpart in Haryana, Birendra Singh, is toeing the same line.
"Ever since the UPA chairperson expressed her concerns regarding the
setting up of SEZs during the Nainital conclave, there has been a
perceptible change in the way states approach these projects. A large
number of SEZs have been approved in Haryana, but then most of them are
still on the drawing board. Let us see how many of them will take off.
Also, in terms of approval of the projects, you will see that the future
decision would be backed by a greater degree of political consensus."

The Haryana government, which had earlier set minimum compensation rates
for acquisition of land, has now decided to increase these limits.

For example, the minimum rate for acquiring an one-acre plot in Gurgaon
was Rs 26 lakh (including interest as compared to Rs 19.50 lakh)
earlier. The rate for other parts of Haryana lying in the National
Capital Region (NCR) and Panchkula have been increased from Rs 16.25
lakh per acre to Rs 20.80 lakh per acre. The minimum rate in the
remaining districts of the state has also been hiked from Rs 6.5 lakh
per acre to Rs 10.40 lakh per acre.

Several industrial projects in Punjab and Haryana have run into
controversies because of land issues. The DLF SEZ project in Amritsar
and the Reliance SEZ project in Jhajjar district of Haryana being two
prime examples.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Punjab_Haryana_tweak_SEZ_policy/articleshow/1800701.cms

Kerala not opposed to SEZs

PTI[ THURSDAY, MARCH 22, 2007 01:40:05 PM]

THIRUVANANTHAPURAM: The LDF Government in Kerala was not opposed to
Special Economic Zones (SEZs) so long as it remained a national policy,
Industries Minister Elamaram Kareem informed the state Assembly today.

If Kerala alone took a stand against SEZs, the state would slip
industrially, Kareem said in reply to a question.

Of the 237 SEZs sanctioned in the country, 11 were in Kerala, he said.

Three other proposals were pending, he added.

Menwhile, the government planned to organise a business and technology
meet in Kochi within next few months to lure investments to the state,
he said.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/Kerala_not_opposed_to_SEZs/articleshow/1793204.cms

SEZs land big gain, allowed to convert

AMITI SEN

TIMES NEWS NETWORK[ THURSDAY, MARCH 22, 2007 01:44:55 AM]


NEW DELHI: Recognising the problems faced by developers in acquiring
huge tracts of land for multi-product SEZs, the government has decided
to allow conversion of sector-specific SEZs, requiring less land, into
multi-product ones once the mandated quantum of land is acquired.

The move will help sector-specific zones such as Reliance's
petrochemicals SEZ in Jamnagar, Essar's steel SEZ in Hazira and Mahindra
Gesco's IT SEZ in Jaipur.

The commerce department has also laid down that SEZ developers should
make adequate provision for rehabilitation of displaced persons as per
the relief and rehabilitation policy of state governments. This move is
significant in view of the political opposition to acquisition of farm
land for industrial projects.

A notification dated March 16 amending the SEZ Rules 2006 states that if
a developer, subsequent to approval or notification of a SEZ, acquires
more contiguous and vacant land which makes the total area meet the
criteria for another class of SEZ, the board of approval (BoA) may
consider such cases on a case-to-case basis.

Other amendments made include granting exemptions on construction
material purchased by contractors appointed by a unit on behalf of the
SEZ unit (it was earlier available only to developers), extending
sub-contracting provisions to developers to enable them to use
facilities like ready-mix concrete, re-positioning of multi-services
SEZs to provide for minimum 50% processing area and including financial
details about promoters, net worth, FDI and source of FDI part of the
check-list for SEZ applications.

Speaking to ET, official sources said the amendment on conversion was
important for both notified sector-specific SEZs looking for an
opportunity to expand and the ones in the pipeline who have ambitions of
setting up multi-product SEZs but are not in possession of enough land.

The mandatory area requirement for multi-product SEZs is 1,000 hectares
while that for sector-specific SEZs the requirement is just 100
hectares. For IT SEZ, the requirement is even lower at 10 hectares.
Sources said while Mahindra Gesco is waiting for a formal approval for
converting its IT SEZ into a multi-product SEZ, both Reliance and Essar
are interested in acquiring more land and converting their
sector-specific SEZs into multi-product ones.

"It is not easy to acquire 1,000 hectares at one go. It is unfair to
keep developers waiting till they acquire all the mandated land. The
government has, therefore, decided to allow developers to go ahead with
sector-specific SEZs and later convert it to multi-product when they
have the land," the official said.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/SEZs_land_big_gain_allowed_to_convert/articleshow/1790866.cms

Narayana Murthy opposes SEZ policy

AGENCIES[ WEDNESDAY, MARCH 21, 2007 03:40:19 PM]

BANGALORE: Software icon N R Narayana Murthy on Wednesday opposed the
practice of acquiring farm lands for special economic zones (SEZs),
saying that the earlier practice of companies building their own
campuses was good enough.

"I agree that we cannot take land from farmers", the non-executive
chairman and chief mentor of Infosys Technologies Limited told
reporters, who sought his views on the raging debate over SEZs.

"The earlier policy, where individual companies were building their own
campuses, was a good one," he said, adding that bringing real estate
players in between was probably not the best thing to do.

Murthy, the face of India's booming IT industry, added: "and that's why
all this furore has been created. I think the earlier policy of
requesting companies to deal directly to get land and build their own
campuses is a good one".

He said that the recent Nandigram incident in West Bengal, where 11
people were killed in police firing during a protest, is likely to have
"some repercussions".

"Because, at the end of the day, let's remember that news travels
through internet pretty quickly and given that it is so, people all over
the world will read it and perhaps in some ways some of them will
misinterpret it too. So in that sense there is always a danger of having
some repercussions", he added.

http://economictimes.indiatimes.com/News/Economy/Policy/Narayana_Murthy_opposes_SEZ_policy/articleshow/1788673.cms

Centre fixes rehab onus on SEZ developer

PTI[ WEDNESDAY, MARCH 21, 2007 08:20:58 PM]

NEW DELHI: With SEZs becoming a political hot potato after killings in
Nandigram police firing, the Centre today announced changes in rules and
made developers solely responsible for rehabilitation of displaced persons.
"The developer (of special economic zones) shall make adequate provision
for rehabilitation of the displaced persons as per the relief and
rehabilitation policy of the state government," a Commerce Ministry
notification said.
The sudden change in rules by the Commerce Ministry, the nodal agency
for approving SEZs, has even preceded the finalisation of the
rehabilitation policy being worked out by the Ministry of Rural
Development.
The announcement comes on a day when leaders of UPA as well as Left
parties are meeting at Prime Minister Manmohan Singh's residence.
Further, in a tightening measure to check speculation by real estate
players, the validity for 'in-principle' approval has been reduced from
three years to one year.
However, the validity for formal approval remains three years because
land possession is essential for getting the final nod from Board of
Approval in the commerce ministry.
The developer will have to show it possesses irrevocable rights over land.

http://economictimes.indiatimes.com/News/Economy/Policy/Centre_fixes_rehab_onus_on_SEZ_developer/articleshow/1790385.cms

SEZs are here to stay, says Manmohan

POLITICAL BUREAU
Posted online: Saturday, March 24, 2007 at 0000 hours IST


NEW DELHI, MAR 23: Prime Minister Manmohan Singh on Friday admitted to
certain problems in the Centre's SEZ policy. Addressing a conclave, the
Prime Minister, however, asserted that the SEZ was here to stay.
"These decisions are in many ways irreversible," Singh said. Making it
clear that there was no going back on the SEZ, he observed: "If there
are gaps in its design or in its implementation, we should halt a little
bit."

Against the backdrop of Nandigram police firing, the Prime Minister said
he does "believe that we should address these concerns if we want the
policy to succeed in the long run." He went on to assure that the
government was formulating a "humane and just policy on resettlement of
those who lose their lands." He said the "SEZ as an instrument of
economic policy has come to stay. But in the process of implementation,
we have been exposed to certain problems which cannot be dismissed." He
also said the "cost of delay was going to be much less than the cost
that would arise if wrong policies were forcibly adopted." He reiterated
that if the government found certain flaws in the policy, it would set
in motion a mechanism to redress those gaps."

It may be mentioned that the Board of Approval in the commerce ministry,
the nodal agency for SEZs, has so far given final approval to 237 zones
and in-principle nod to another 166. Approvals, however, have been kept
on hold for the past few months. The Prime Minister added: "India is a
democracy and democracy sometime seems to be fickle-minded". He,
however, maintained that "democracy was the strength of the country.'

On another issue, the Singh maintained that a common currency for Asian
countries in the line of Euro for European nations was some years ahead.
"Time has not yet arrived for a common Asean currency like Euro," Singh
observed. He felt a this currency would require "more coordinated
efforts and might become a reality in near the future."

On the issue of exploring Asian funds for infrastructure, he said the
government was "confident that rising levels of savings will largely
meet fund requirements for infrastructure." The Prime Minister also
favoured a "strong vibrant debt market for long-term funds for the
infrastructure sector." He felt the public-private partnership "has
begun to show results in ports, airports and other infrastructure sectors."

With the Saarc Summit to be held next month, the Prime Minister said
India wanted its neighbours to feel secure and confident that "in New
Delhi they have a wellwisher".

http://www.financialexpress.com/fe_full_story.php?content_id=158810

Left decries ‘piecemeal changes’ in SEZ policy


 
POLITICAL BUREAU
Posted online: Saturday, March 24, 2007 at 0000 hours IST
 
        
 
 
NEW DELHI, MAR 23:  The CPI(M) on Friday launched a fresh attack on the Centre for ignoring the Left parties' suggestion while making "piecemeal changes" in the SEZ rules. The party demanded that the government stop making such "piecemeal changes and review the entire policy."
In a statement the Marxists pointed out that while one of the change allowed the developers to "acquire more land in contiguous areas, the other seeks to continue with the tax concessions for the contractors working for the private SEZ developers."



 
The statement maintained that the changes go "against the suggestion given by the Left parties that a ceiling should be fixed for the size of SEZs."

The CPI(M) wondered how the government could come out with amendments even before the group of ministers (GoM) could complete the review of the entire SEZ policy.

It said: "The empowered group of ministers (eGoM) must finalise their report and only then the required changes should be put in place."
 http://www.financialexpress.com/fe_full_story.php?content_id=158819

--
Sudarshan Rodriguez

 

 

 

Sudarshan Rodriguez,

Marine Conservation Analyst

Project Coordinator,

Post- Tsunami Environment Initiative

(www.ptei-india.org)

Flat 2B, Adithya Apartments,

38 Balakrishna Road,

Valmiki Nagar, Thiruvanmiyur,

Chennai-600 041

Tamil Nadu, India.

Phone:+91 44 420 19470

Mobile: +91 9840680127

Fax: +91 44 420 19468

 

Email: sudarshanr@yahoo.com

 

You are not what you do , you do what you are

One's profession and career should be their  hobby, passion and cause


Govt may go slow on SEZs

Our Bureau

Concept is here to stay and decisions taken are irreversible, says PM



Dr Manmohan Singh

New Delhi March 23 The Prime Minister, Dr Manmohan Singh, on Friday
indicated that though there could be some slowdown in the setting up of
Special Economic Zones (SEZs), the concept was here to stay.

Faced with nationwide criticism of the West Bengal Government after the
Nandigram firing that killed 14 people opposing acquisition of farm land
for an SEZ, Dr Singh today hinted that the Government might go slow due
to the difficulties faced, but the decisions were irreversible.

Responding to questions at the India Today conclave on whether the
Government would revise the SEZ policy in view of the Nandigram
incident, Dr Singh said, "These are decisions which are irreversible.
Therefore, it is very important that before we move, if there are any
gaps in the performance, gaps in the design and gaps in the
implementation, we should halt a little bit even though it takes time."

The Prime Minister added that while "the challenges we face are after
all not so new," he went on to say that, "At the same time, there are
challenges which are truly new. The challenge of addressing the
ever-increasing consumption needs of billions of people."

"If all the developing countries of the world were to aim for a standard
of living which is currently seen in the more developed countries, we
need to reflect what the environmental consequences would be. Is our
planet capable of sustaining a high consumption lifestyle for all its
inhabitants? This is certainly a new challenge for which there are no
ready-made answers," he said.

Saying that India's energies should be focused on priorities at home,
the Prime Minister said, "We need a more competitive industry and a more
dynamic agricultural economy. Our energies must be focused on these
priorities at home. We must get our act together so that we can make the
best use of the opportunities presenting themselves before us."

Later, speaking at the conclave, the Minister for Commerce and Industry,
Mr Kamal Nath, asked the State governments to act with sensitivity
regarding land acquisition for industrial projects.

"State governments need to be sensitive on land acquisition," he said,
and added that not only the landowners but others making a living out of
the local economy should also be rehabilitated.

Mr Nath said that on an average as many as 10 people were living on each
hectare of land. The number of people who would be displaced by land
acquisition has increased and they should be properly rehabilitated, he
added.

http://www.thehindubusinessline.com/2007/03/24/stories/2007032405200100.htm

New SEZs without affecting agriculture'

Our Bureau

Plan for two shipyards

--------------------------------------------------------------------------------
The Government will introduce a scheme to resolve the delay in fixing
the market value for property.
--------------------------------------------------------------------------------


Chennai March 23 Tamil Nadu is for setting up new special economic zones
as long as agriculture is not affected, said Mr K. Anbazhagan, Finance
Minister, announcing a new SEZ in Southern Tamil Nadu.

In the Budget for 2007-08, the Minister announced plans to set up two
shipyards, a graphite beneficiation project and the special economic
zone in Virudhunagar.

Mr Anbazhagan said two new shipyards are to come up in the Chennai
Ennore Port area and Cuddalore at a total cost of Rs 3,700 crore.

Graphite unit


To fully utilise the graphite deposits in Sivaganga, a graphite
industrial unit would be set up using modern graphite beneficiation
technology. Tamil Nadu Minerals Ltd would identify a private sector
partner, he said.

Large land areas were available in Southern Tamil Nadu, where SEZs can
be set up without affecting agriculture but generating thousands of jobs.

Registration


The Government will introduce a scheme to resolve the delay in fixing
the market value for property. Over 27,000 registered documents with Rs
400 crore in stamp duty was blocked due to the delay. Owners will be
able to avail themselves of stamp duty concession and get back the
documents under the scheme, he said.

e-tendering


To make the tendering process transparent, the Government would
introduce an electronic tendering system. In the first phase to be
introduced from July 1, tender forms for open tenders exceeding Rs 10
lakh over the Internet. In the second phase starting from October, bids
can also be submitted on-line through Web sites of the departments
concerned.

Power


The Central Government has announced Rs 26,000 crore additional
investment to set up more nuclear reactors with a generation capacity of
4,000 MW at Koodankulam, Tirunelveli. This would be in addition to the
2,000 MW coming up at the site. This was the largest investment in the
State by the Centre in recent times, he said.

Urban Transport


In the coming year, 3,000 new buses will be purchased at a cost of Rs
350 crore by the State Transport Undertakings.

Metro Rail Project


The Delhi Metro Rail Corporation recently submitted the detailed project
report for a Rs 9,000-crore metro rail project in Chennai. The project
comprising two rail corridors will have a total length of 49 km and is
expected to start operation in five years.

The Tamil Nadu Government has agreed to bear two-thirds of the cost of
the Mass Rapid Transit System to extend it from Velachery to St. Thomas
Mount. The estimated cost for the project is Rs 416 crore. The second
phase, the line between Mylapore and Velachery, is nearing completion,
he said.

http://www.thehindubusinessline.com/2007/03/24/stories/2007032402431900.htm

Changes in SEZ Rules: CPI (M) surprised

Special Correspondent


NEW DELHI: The Communist Party of India (Marxist) on Friday expressed
surprise over the move by the Commerce Ministry making certain
amendments to the Special Economic Zones Rules. It asked the United
Progressive Alliance Government not to make piecemeal changes in it.

Reacting to the March 6 notification by the Ministry, which allows a
developer to expand the area of SEZ by acquiring more vacant land in the
contiguous area, the party's Polit Bureau said in a statement this would
mean that the scope of the SEZ could be expanded beyond the initial
approval.

"This goes against the suggestion give by the Left parties that a
ceiling should be fixed for the size of the SEZ," the statement said.

It said another amendment that sought to continue with tax concessions
for the contractors working for private SEZ developers should also be
removed.

It pointed out that the CPI (M) and other Left Parties had submitted
their position on what changes should be made and that there should be
no piecemeal changes in the SEZ rules.

http://www.hindu.com/2007/03/24/stories/2007032408711200.htm

Policy on SEZ irreversible: Manmohan

New Delhi: Facing criticism on the Special Economic Zone issue,
particularly after the police firing at Nandigram in West Bengal, Prime
Minister Manmohan Singh on Friday hinted at the Government going slow on
the process due to ``inadequacies'' but made it clear that the decision
was ``irreversible.''

``These are decisions which are irreversible. Therefore, it is very
important that before we move, if there are any gaps in the performance,
gaps in the design and gaps in the implementation, we should halt a
little bit even though it takes time,'' Dr. Singh said at the India
Today conclave here.

His comments came in response to a question whether the Government
proposed to overhaul the SEZ policy in view of strong reservations in
several quarters.

But the cost of delay was going to be much less than the cost that would
arise if policies were ``bulldozed'' regardless of the human, social and
economic concerns, he said, adding that these concerns were needed to be
addressed ``if we want the policy to succeed in the long run.''

Land acquisition


The Prime Minister said that on the issue of land acquisition for public
purposes ``there have been inadequacies in compensation and in ensuring
that interest of all stakeholders who suffer in this process are taken
into account''.

The Government was in the process of formulating a ``humane, effective
and just policy'' with regard to resettlement of land oustees, Dr. Singh
said.

http://www.hindu.com/2007/03/24/stories/2007032401071300.htm

To go slow on SEZs

New Delhi: Prime Minister Manmohan Singh on Friday hinted at the
Government going slow on the SEZ process. He gave this indication at the
India Today conclave here. — PTI
http://www.hindu.com/2007/03/24/stories/2007032411300106.htm

SEZs here to stay, but will be made more humane: PM

Saturday March 24 2007 05:18 IST
NEW DELHI: Prime Minister Manmohan Singh on Friday conceded his
government was „facing certain problems" with its policy on special
economic zones, but said it would make „necessary changes" to fix any
faults. He, however, reiterated that SEZs were here to stay.

„These are decisions which are in many ways irreversible. If there were
gaps in its design or in its implementation we should halt a little
bit," Singh said at the India Today Conclave on Friday.

He said the cost of delay was going to be much less then the cost that
would arise if wrong policies were „bulldozed regardless of human,
social and economic concerns".

„I do believe that we should address these concerns if we want the
policy to succeed in the long run," Singh said, replying to questions
after his speech at the Conclave.

Singh said a „more humane, effective and just" rehabilitation policy was
in the process of being formulated. Pending the „finalisation of such a
scheme, there was some delay in going ahead with the announced policy of
the government on SEZs".

In a bid to address some of the concerns that arose most recently from
Nandigram, the government earlier this week put the onus of
rehabilitating the people displaced by an SEZ on the developer.

The Board of Approvals in the Commerce Ministry -- the nodal agency for
SEZs -- has so far given final approval to 237 such zones and
in-principle nod to another 166. However, approvals have been kept on
hold for the past few months.
http://www.newindpress.com/NewsItems.asp?ID=IEH20070323185641&Title=Top+Stories&rLink=0

Farmers take to streets against SEZ in Raigad

Meena Menon

Government will not come between company-farmer talks on land sale, says
Maharashtra Chief Minister

--------------------------------------------------------------------------------

Withdraw land acquisition notices: protesters
Reliance announces rehabilitation package
--------------------------------------------------------------------------------

— Photo: Vivek Bendre

A BIG `NO': Opponents of the proposed Special Economic Zone stage a road
blockade at Wadkhal in Raigad district of Maharashtra on Friday.

Pen (Raigad district): Hundreds of farmers took to the streets on Friday
opposing the Reliance-promoted Mahamumbai Special Economic Zone (SEZ)
and blocked the Mumbai-Goa highway and other roads near Pen in Raigad
district in Maharashtra for over three hours.

The Shiv Sena and the Peasants and Workers Party (PWP) alliance recently
won the majority of seats in the zilla parishad elections in Raigad
district. Shouting "Chale Jao (go away) SEZ" slogans the protesters
waved the saffron and red and white flags of their parties.

Traffic diverted


Led by veteran PWP leader N.D. Patil, the agitation began at 11 a.m. at
Vashi Naka near Pen. The protesters walked three km to Wadkhal Naka on
the Mumbai-Goa highway, about 80 km from Mumbai. Traffic was diverted at
various places, according to the police, causing huge pile-ups along the
way.

The protest was part of a nationwide action against SEZs on the occasion
of Shaheed Bhagat Singh Smriti Diwas. The main demands were that the SEZ
Act should be withdrawn, and a national debate should be held on
agriculture, land acquisition and development.

The Government is acquiring land in 45 villages in Pen, Uran and Panvel
talukas of Raigad district for the Mahamumbai SEZ promoted by Reliance.

People have opposed the land acquisition but the District Collector
issued an order that the farmers can sign a memorandum of understanding
with the company. Reliance also announced a rehabilitation package
offering Rs. 25 lakh per hectare.

While Chief Minister Vilasrao Deshmukh has been saying that land
acquisition notices can be withdrawn he has not made any administrative
move to do so.

Assurance in Council


Replying to Jayant Patil from Raigad (PWP) in the Legislative Council on
Friday, Mr. Deshmukh said the Government would not come between any
discussion between the company and farmers on land acquisition. He said
the farmers should get a good price or market rates for land and the
Government supported the well-being of farmers.

The rasta roko was called off around 2.30 p.m. after the protesters were
told about Mr. Deshmukh's statement in the Upper House. However, the
main demand, as articulated by Mr. Patil, was that the Government should
withdraw the land acquisition notices issued to people in 45 villages,
which fall in the Mahamumbai SEZ. He said the Government must not
endorse this acquisition. "By taking to the streets the people have
shown their displeasure and the Government has to acknowledge this," he
said.

"Where will we go?"


Women from Borje village Mahila Mandal wore green and red saris as a
mark of protest. Manjula Mhatre, president of the Mahila Mandal, said:
"Where will we all go once we sell our land. Agriculture is our life."

Durga Mhatre, a senior citizen, said: "Reliance must be thrown out of
this area. What will we eat after selling our land to them?"

Protesters deflated tyres of trucks and buses. The protest, which was
peaceful, was watched by a large posse of policemen and senior officers.
Some of those policemen on security duty stand to lose their land in the
SEZ. One of them from Hashivre village has four acres in his family,
which has opposed land acquisition.

Dilip Patil from Kane village said there were over 70 policemen,
including 12 inspectors from the village, where land was being acquired
for the SEZ.

Eye-opener


Mr. Patil said the people had enough capacity to throw out Reliance on
their own but the Government's support made things difficult. "What has
happened in West Bengal is an eye-opener for all of us and the
Government must desist from such actions," he added.

The issue was not whether land was irrigated or not. Farmers survive on
dry land crops and they could not afford to give up their land, whatever
the price might be, he said.

Bhagwan Zemse from Kane said no farmer wanted to sell land to Reliance.
"We do not want to give up our land as there will be no options for us,"
he said, adding that the rehabilitation package offered by Reliance was
"bogus and just a ruse to deceive villagers."

"Scrap SEZ"


Anant Patil, president of the committee of 24 villages in Pen taluka
affected by the SEZ, said the zone should be scrapped at once. Right
from the Prime Minister, many people were making statements that fertile
land should not be acquired and the Government should stop acquiring
land for SEZs, but none of these things was translating into policy. Why
should farmers give land to a private company, he asked.

He said that in Pen taluka there were people displaced by the Koyna dam,
still without potable water. They were living in miserable conditions.
This was the dismal track record of the Government in rehabilitation, he
said.

Over 70 SEZs


Maharashtra has over 70 approved SEZs, the highest in the country. In
Raigad district alone, eight are proposed. People protested at various
other places in Raigad district too, apart from other parts of the
State. On April 5, a morcha is planned in Mumbai to enforce the demand
for scrapping of land acquisition notices.

http://www.hindu.com/2007/03/24/stories/2007032401131300.htm