The Hindu Business Line : Govt lifts freeze on SEZs, caps size at 5,000 hectares

New norms
States free to fix lower ceiling on SEZ size
Govt plans comprehensive Land Acquisition Act
88 applications yet to be approved

Mr Kamal Nath

New Delhi April 5 The Government today lifted the freeze on special economic zones (SEZs) while simultaneously tightening rules by prescribing a ceiling on the size at 5,000 hectares for multi-product SEZs and increasing the processing area from 35 per cent to 50 per cent for both multi-product and sector-specific zones.

The Empowered Group of Ministers on SEZs, headed by the Union External Affairs Minister, Mr Pranab Mukherjee, met today to arrive at the decision.

After a lull of two-and-a-half months, since the last meeting of the Group froze SEZ approvals on January 22, today's decision has come as a clear signal to developers and units in these zones that they could go ahead with their business plans.

Fixing of the upper ceiling of 5,000 hectares and raising the processing area uniformly would also allay any apprehensions about possible misuse of land for purposes other than the prime one of setting up manufacturing activities, generating exports and creating dedicated infrastructure amenities within these enclaves.

With the SEZ issue turning into a political hot potato, the Government has also given States the freedom to fix a lower ceiling on the size of the SEZ.

It has also been said that there would not be any compulsory acquisition of land for SEZs.

The Commerce and Industry Minister, Mr Kamal Nath, told newspersons that the meeting also gave nod to notification for 83 applications that were formally approved.

This takes the total number of notified SEZs from 63 to 146.

This leaves 88 cases to be notified out of 234 approved by the Board of Approvals so far.

The Minister clarified that the decisions taken today would be applicable to all SEZs, "including those which have already been notified."

On pending applications for SEZs, he said that they may be processed for in-principle, formal approval and notifications subject to the proviso that the State Governments will not undertake any compulsory acquisition of land for such SEZs.

He also said that the Ministry of Rural Development would formulate a comprehensive Land Acquisition Act.

A broader resettlement and rehabilitation policy would be worked out to ensure livelihood from the project to at least one person from each displaced family, he added.

Later, the Commerce Secretary, Mr G.K. Pillai, told newspersons that out of the 83 applications of formal approvals that would be notified now, 54 have been cleared by the Law Ministry; the others are in the process of getting notified.

The major SEZs whose notifications are pending include Brandix Textiles City at Visakhapatnam, Kakinada SEZ at Kakinada, Infosys SEZ at Pune, Ascendas's ITPL SEZ at Bangalore, Jindal Stainless Steel SEZ at Kalinga Nagar (Orissa), Lotus Footwear SEZ at Cheyyar, Suzlon Infrastructure SEZ at Coimbatore and Wockhardt Pharma SEZ at Aurangabad.

Officials said that once all the 234 formally approved SEZs become operational, investment would be of the order of Rs 3 lakh crore and four million jobs would be generated.

They also said that exports projected by all notified SEZs numbering 82 so far (19 old plus 63 new) in 2007-08 would be Rs 67,300 crore.