Parliamentary panel may seek scrapping of SEZ approvals

Parliamentary panel may seek scrapping of SEZ approvals
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First Published: Thu, Mar 22 2007. 01 43 AM IST
Updated: Thu, Mar 22 2007. 01 43 AM IST
New Delhi: Adding to the chorus of opposition to special economic zones (SEZs), an important parliamentary committee has begun to firm up its strong opposition to the acquisition of farm land for such zones.
The committee, which is expected to submit its final report to Parliament in May, is also likely to seek cancellation of all approvals given to developers who avail tax exemptions and simply create infrastructure that is then leased to other companies.
The committee—whose members have been visiting SEZs, interacting with farmers, developers and government officials—will also suggest that such economic zones should be ideally located near the coastal areas, similar to zones in China, so that only marsh or coastal land is used rather than farm land.
“The committee is also of the view that the relief and rehabilitation policies, which some of the states have in place, are not working properly,” said a member of Parliament familiar with the committee work. So, a Central relief and rehabilitation policy should be formulated and implemented soon, the MP said.
The government is already giving final touches to the revised National Rehabilitation Policy 2007. This follows Prime Minister Manmohan Singh’s intervention in the aftermath of violent protests at the SEZ site in West Bengal’s Nandigram in January.
The committee, on its visits to Gujarat, Maharashtra and Haryana, found that developers of some of the zones had asked the state government to begin land acquisition while simultaneously acquiring land on their own.
“The developers were coercing the farmers to part with the land and telling them that if they did not sell the land to them, the state government would in any case acquire the land more cheaply. Hence, they were better off selling the land privately,” the MP said. He did not want to be named because the committee was still completing its work.
The MP said the commerce ministry had agreed to a suggestion of the committee to invite a representative of the agriculture ministry to the meetings of the Board of Approval, which is the inter-ministerial agency for approving SEZs.
“The committee has suggested since there are concerns that diversion of farm land for the zones could, in the long run, affect the food situation in the country, the agriculture ministry should be involved in the approval process,” he said.
Another issue that’s expected to figure prominently in the report involves approvals granted to real estate and infrastructure developers.
He said the Land Acquisition Act clearly states that the land can only be acquired for public purpose. However, the committee found that infrastructure firms are being given permission for setting up zones. These firms are merely setting up infrastructure and leasing them out. In such cases, the committee members think that approvals should be cancelled.
Meanwhile, the commerce ministry, the nodal ministry dealing with the SEZ policy, will release a ‘progress report’ every two months on the 63 zones already notified.
“We expect to release the first progress report in May,” said a ministry official who did not want to be named. “The report will give the status of development in the notified zones, the investment and most importantly the employment generated in each zone. The development commissioners of the notified zones have been asked to begin work on the progress reports.”
Ministry officials said that even in a worst-case scenario, if no more new land acquisitions were allowed, the ministry hoped to get approvals for at least the 271 proposals where either notifications were pending or where the land had already been acquired. “Even if the 271 cases are allowed to go through, there should be sufficient SEZ development at least for the next two-three years,” an official said.
The 31-member committee is headed by Rajya Sabha member Murli Manohar Joshi, of the Bharatiya Janata Party. There are nine other members from the Upper House, and 21 from Lok Sabha, representing all major political parties. The committee’s report will not be binding on the government, but the Centre will have to submit an action-taken report on the recommendations.
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First Published: Thu, Mar 22 2007. 01 43 AM IST