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DLF, Reliance SEZ's Close to Reality - DNA 04th December 2007

Centre plans case-by-case easing of ceiling on size

NEW DELHI: Mega special economic zones (SEZs) such as the 10,000-hectare Maha Mumbai SEZ and the 25,000-hectare Haryana SEZ proposed by Reliance Industries Ltd (RIL) and another one by real-estate giant DLF are close to becoming a reality.

These projects have been in a limbo since the group of ministers (GoM) imposed a 5,000-hectare ceiling on the size of multi-product SEZs, following widespread protests against land acquisitions for SEZs.

But a window of opportunity has opened for these SEZs after the government approved the new Relief and Rehabilitation Policy and decided to amend the Land Acquisition Act.

Commerce secretary G K Pillai, who heads the approval board for SEZs, told DNA Money: “Once the new relief and rehabilitation policy and the land acquisition Act amendments are in place, the government will consider relaxing the upper limit of 5,000 hectares on a case-by-case basis.”

Pillai was talking to reporters on the sidelines of the India Economic Summit here on Monday.

Of the 34 multi-product SEZ proposals, Pillai said there are 3-4 projects where the land (in excess of 5,000 hectares) has already been acquired or bought from the farmers.

“We will take a view on this and have a fresh look (after the Bill is passed) on a case-by-case basis,” he said.

He said farmers would also be given an option of becoming stakeholders in the company that comes up on their land.

The change in government stand is prompted by its perception that the SEZ policy has been a success, but countries like China score over India in terms of scale in developing SEZs.

Addressing a session, ‘Reality of SEZ’, Pillai said the response for SEZs has been tremendous.

The government has already formally approved 404 SEZs, of which 172 have been notified.

About 60 of them have already generated direct employment of about 52,000 and indirect employment of 1,00,000.

With growth likely to be exponential, these numbers could shoot up to 1,50,000 by March 2008 and to 6,00,000 by the end of 2009. He also expected foreign direct investment in SEZs to increase three-four fold within the next year.

Acknowledging the need for addressing issues like external infrastructure, he said the government might relax the upper limit on the size of SEZs.

On revenue, as per separate studies conducted by the commerce and finance ministries, the notional losses were more than compensated by the increase in economic activity, Pillai said.

Distinguishing the SEZ models in India and China, Pillai said that India had followed a legislative process for SEZs unlike China. Considerations like land and location of Indian SEZs were market-driven and decided by private owners. In China, the government is the decision-maker.