Economic Survey on SEZs
Acquisition of land for developing special economic zones (SEZs) is a major
cause for concern, says the Economic Survey for 2007-08, which was released
yesterday by Finance Minister P Chidambaram. The Finance Ministry presents
the Economic Survey in Parliament every year, just before the Union Budget.
It is the ministry's view on the economic development of the country in the
year gone by, and the prospects for the year ahead.
The survey has also expressed "apprehension" about the possible "misuse of
the (SEZ) scheme and relocation of existing industries into SEZs". It says
the Board of Approval (BoA) headed by Commerce Secretary G K Pillai, which
approves SEZ proposals, would not give a go-ahead to SEZs that "have carried
out or propose to carry out compulsory acquisition of land. after 5 April
2007".
There you have it. The Union Finance Ministry is now articulating the very
apprehensions that led people in Goa to agitate against SEZs and, as a
result, prompted the state government to scrap them. If there is any single
factor that predominated in the revolt against these autonomous industrial
republics, it was land. Most of the SEZs were grabbing many times the amount
of land they needed, merely because they were getting it for a song.
For example, the K Raheja Corporation Pvt Ltd's IT/ITES SEZ at Verna was
spread over an area of 105.91 hectares, or 10.59 lakh sq metres. However
many units they were planning to put up; even if every employee of every
unit lived on the site and got world class recreational facilities, they
wouldn't have needed more than 1 to 2 lakh sq metres of land. A look at
their MindSpace BPO units in other cities will make this very clear. The
Cipla-Meditab Pharma SEZ got much more land.
That is why the Economic Survey advises state governments to first acquire
wastelands and, if only necessary, single-crop agricultural land for SEZs.
If at all double-cropped agricultural land has to be acquired, says the
survey, it should not exceed 10 per cent of the total land acquired. It
seems the central government, at least, has learnt the lessons of Nandigram
and Goa.
However, the BoA's latest salvo - that the Goa government will have to
examine the question of compensation to the three notified SEZs - is an
issue that has to be handled with extreme care, as each of them has a
'sponsor' in the shape of a prominent and powerful local politician. These
gentlemen stand to lose a great deal if the promoters of their pet projects
have to depart with empty pockets. And it is here that ordinary people need
to be very careful, because some of them occupy prominent positions in the
present government.
There will be a lot of pressure on the Goa government to agree to completely
unrealistic claims for compensation by the developers of SEZs, both from
within and without. These claims need to be scrutinised very carefully, as
the figures the promoters have been touting to the media seem highly
inflated and completely at variance with the work on the ground.
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