The Telegraph
Since 1st March, 1999
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Rethink on SEZ land cap

New Delhi, Dec. 3: The government is exploring the possibility of relaxing the 5,000-hectare ceiling on land for special economic zones (SEZs).

“Now that the resettlement and rehabilitation policy is in place, the government may think of relaxing the ceiling on the size of SEZs,” commerce secretary G.K. Pillai said at the India Economic Summit here today.

He said the government might review the ceiling clause once Parliament passes the Land Acquisition Bill, which would be tabled this week. The government will grant the relief on a case-by-case basis, particularly to multi-product zones.

There are proposals for 34 such zones, and three to four of them are of more than 5,000 hectares.

Reliance Industries, DLF and Omaxe stand to benefit from the move. Reliance has plans for two 10,000-hectare zones in Navi Mumbai and Haryana and DLF intends to set up one of 8,000 hectares in Gurgaon. Parsvnath wants to set up a 6,070-hectare zone in Alwar, Rajasthan.

Pillai said the government would give farmers the option of becoming stakeholders in the company coming up on their land.

The SEZ model of the country is often compared with the one in China. Analysts said China had huge zones and it made sense for India to follow the Chinese.

They said the commerce secretary’s comments indicated a shift in the stand of policy-makers towards larger zones.

The government had given formal approval to 404 SEZs and in-principle approval to 160, while notifying 172 zones.

Pillai said the government expected the creation of 150,000 jobs in the zones by the end of the fiscal and 600,000 jobs by December 2009.

The zones have attracted investments of $13 billion, of which $3 billion is foreign direct investment.

Export shortfall

India’s exports were up 35.65 per cent in October but that may not be enough to reach the target of $160 billion for this fiscal.

“If this (October) trend continues, we may achieve exports of $140-145 billion against the target of $160 billion,” Pillai said.

Exports in October stood at $13.30 billion, while imports were up 24.27 per cent to $20.79 billion. The deficit of over $7 billion was higher than the $6.92-billion deficit a year ago.

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