It is ironical that special economic zones (SEZs) were conceived as enclaves free of state control but are now the stompingground for ministers and bureaucrats. This paper opposed the manner in which the state was dispossessing farmers so that their land could be given to companies that wanted to set upSEZs. So, an end to compulsory land acquisition by state governments is welcome.
But another major change was announced in the SEZ policyyesterday—to limit the size of an SEZ. No enclave can be bigger than 5,000 hectares. It is not clear why the government should intervene in what will now be a market transaction between land owners and SEZ developers. What if more farmers want to sell land?
Will the government stop them? Restrictions on the number and size of SEZs are a throwback to the meddlesome pre-reform era. This is old-style licensing at its worst—and will inevitably lead to corruption and rent-seeking.