The government is likely to propose a freeze on any new special economic zones, cap the size of multi-purpose zones and also direct state governments not to acquire land on behalf of developers.
An empowered group of select cabinet ministers, headed by external affairs minister Pranab Mukherjee, is slated to meet on 11 April to finalize these proposals.
The group’s decision does not have to be ratified by the Union cabinet.
The group had last met in January this year, when it decided to freeze clearance to any SEZs, barring issuance of routine approvals to 63 SEZs already notified.
This decision followed several high-profile, country-wide political protests against land acquisition for setting up of SEZs. Now the government is once again, albeit with caution, looking to kick-start the process.
“There has been a demand from several quarters that there should be an upper limit on SEZs. The eGoM will consider this aspect and could suggest an upper limit of 5,000 hectares for multi-product (zones), in which case the minimum size for such zones could come down to 500 hectares,” said a top government official who did not wish to be identified.
At present, multi-product SEZs, which allow for manufacturing activities across sectors, have no upper limit on size while there is a minimum area stipulation of 1,000 hectares (200 hectares for special states such as Assam, Arunachal Pradesh, Mizoram, Manipur, Sikkim, Goa and Jammu and Kashmir.)
The government has 60 cases that have been formally cleared and are awaiting notification; another 111 cases have received formal approval and where land acquisition is complete; 162 cases which have been given in-principle approval and where land is being acquired; and another 350 cases that are pending before the board of approval, the inter-ministerial agency set up to approve SEZ proposals.
“Since these cases are sufficient to ensure SEZs being developed for the next five years, the eGoM could take a view that the government will not entertain fresh proposals for setting up of SEZs,” the official added.
The official said the eGoM was also expected to take a view that state governments need not acquire any land for SEZs unless a state itself wants to set up the zone.
“If the view is approved, the 162 SEZs, which have received in-principle approval and are in the process of acquiring the land, will face cancellation of their land notifications if the land (has) been acquired by the state governments. Such developers will have to begin acquisitions of land afresh through private acquisition,” the official said.
Having obtained the political mandate from within the Congress, the eGoM is expected to clear the way for notification of 60 SEZ proposals which have already been formally cleared by the board of approval.
Another 111 proposals where land has already been acquired could also be allowed to go through.
Commerce ministry officials said the eGoM would have on its agenda the 21 points raised by several political parties, issues flagged by chief ministers of certain states and even some members of Parliament.
The members of the eGoM include finance minister P. Chidambaram, law and justice minister H.R. Bhardwaj, minister of communication and information technology Dayanidhi Maran, deputy chairman of Planning Commission Montek Singh Ahluwalia, minister of science and technology and ocean development Kapil Sibal, besides commerce minister Kamal Nath.
Political parties, particularly the Left and the Bharatiya Janata Party, are not willing to accept the line being taken by the government.
“You can’t dilute the SEZ concept to create tax havens or make money,” says Prakash Javadekar, a spokesperson for BJP. “The government is only trying to wriggle out of a messy situation by trying to do a little tinkering here and there. It is yet to address the basic question: why SEZ? We are very clear it is only for exporters, not for developers. But where is the national register of demand, based on genuine need of exporters?”
The Communist Party of India (Marxist), which has come under fire for the handling of Nandigram by the Left Front government, says it is clear the government has to go in for a major overhaul of the policy.
While the CPI(M) and CPI continue to press for changes in the policy, the All-India Forward Bloc and Revolutionary Socialist Party are totally opposed to the policy.
“After Nandigram proved our apprehensions, we have told the West Bengal Left Front as well as the government that we will oppose the SEZ policy in any form,” said Forward Bloc national secretary G. Devrajan.
Ashish Sharma contributed to this story.