The Telegraph
Since 1st March, 1999
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Hint of SEZ land cap review

New Delhi, April 18: Commerce minister Kamal Nath today said the government was open to proposals for special economic zones (SEZs) exceeding 5,000 hectares “if circumstances permit”.

“In future, should a proposal come that looks at an area that may be larger, we are willing to look at it...,” Nath told reporters after releasing a UN report. Earlier this month, the government had placed a cap of 5,000 hectares on SEZs.

Nath said the limit on land size was one of the parameters for clearing an SEZ and, therefore, amenable to modification on a case by case basis.

The cap is not part of the SEZ act which would have made it immutable.

“Right now we have certain sets of rules based on certain circumstances. They (circumstances) may change in future once we have a rehabilitation policy ... We will look at it,” Nath said.

The minister’s statement may pave the way for SEZs of more than 5,000 hectares.

The cap had hit Reliance Industries, which is planning SEZs of more than 5,000 hectares at Maha Mumbai and Haryana. Real estate companies DLF and Omaxe, too, have similar plans.

However, the Left may take umbrage at Nath’s comments. They have been demanding that the limit be lowered to 2,000 hectares.

On April 5, the Centre had said land for SEZs must be acquired with the consent of owners and put a 5,000-hectare cap on their size.

The ceiling will not affect projects in Bengal, where the largest proposed is Salim Group’s SEZ across 5,000 hectares (12,500 acres).

“No state can compulsorily acquire land (for an SEZ) from farmers through the Land Acquisition Act,” Nath had then said, adding the promoters would have to buy from owners willing to sell at the market rate.

However, little prevents a government from acquiring land under the act, citing public purpose for which no consent is required, and later handing it over for an SEZ.

Growth forecast

The Indian economy is expected to grow at 9 per cent in 2007, according to an annual survey released here today.

This growth rate has been forecast despite a slowdown in the US and Europe.

However, the survey warned that “China represents either a direct or potential export challenge to all countries in the Asia-Pacific region”.

The survey by the UN’s Economic and Social Commission for Asia and the Pacific (ESCAP) says India’s economy, unlike many other countries, is driven more by domestic demand than exports.

The slowdown in the West would have a smaller impact on India than on China or Japan, which are more dependent on exports.

However, China and Japan along with India will remain the drivers of growth in the Asia-Pacific. The region is expected to see a lower growth rate of 7.4 per cent compared with 7.9 per cent in the previous year.

According to UNESCAP executive secretary Kim Hak-Su, the survey forecasts that the average price of oil in the region will be lower at $60 per barrel this year compared with $65 in 2006. However, it does not rule out the risk of a sudden oil shock during the year, he added.

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