Mumbai: The government is reviewing its policy on acquiring land for special economic zones (SEZs) and it would no longer be compulsory for owners to sell, Union commerce minister Kamal Nath said on Tuesday.
“The whole land acquisition policy is being relooked at, along with the rehabilitation policy,” Nath said.
“The government has one clear thing on SEZs. SEZs are here to stay. The question is land acquisition. There would be no compulsory land acquisition,” he said.
The government has faced protests from farmers and land owners over its plans to acquire land to develop hundreds of SEZs—large, tax-free industrial enclaves—around the country to boost exports and economic growth.
“SEZs are very important engines of growth. Land acquisition is not confined to SEZs, but also for infrastructure development,” the minister said.
Nath termed the recent appreciation of the rupee as a cause of “concern”.
“The rupee’s rise is connected to international factors also like the dollar’s fall,” he said, adding that the government may consider refund of taxes to the exporters.
“We are discussing with export councils on the way forward,” he said.
The currency, the best performer in Asia this year, has surged 9.4%, threatening to slow growth in exports that account for about 10% of India’s $854 billion (Rs34.16 trillion) economy.
Growth in shipment of goods slowed to 7.4% in the quarter through March, or less than half the pace a year earlier, according to data compiled by Bloomberg.
Gains in the currency won’t widen the trade deficit, Nath said. The gap between the value of imports and exports narrowed to $3.8 billion in March, the least since June, according to the commerce ministry.
On foreign direct investment (FDI), the minister said India expects to receive double the amount of FDI this year as the economy sustains record growth.
FDIs into India may reach $30 billion in the year ending 31 March from $15.7 billion in the previous year, the minister said.
He said India must sustain its current all-time high investment rate to accelerate economic growth.
India’s investment rate is 35% of gross domestic product, and this pace must be maintained until 2012 to help accelerate growth to as much as 10%, he said.
India’s economy grew 9.2% in the year ended 31 March, the fastest pace in almost two decades.
Bloomberg contributed to this story.