The Empowered Group of Ministers on SEZs will be considering a proposal next week that will make it easier for developers to acquire land

The Empowered Group of Ministers (EGoM) on Special Economic Zones is to meet on August 7, 2008, to consider dilution of a crucial prerequisite relating to land acquisition, making it easier to acquire land that has the government’s in-principle approval.

Since landholdings in India are highly fragmented, it is difficult for developers to get the large tracts of land required to set up Special Economic Zones (SEZs). There is also a contiguity clause that requires the developer to have a mass block of unseparated land to qualify for tax sops.

Once a developer gets in-principle approval, state governments help him by compulsorily acquiring land through their industrial development corporations. Conditionalities are imposed, however, such as employment generation for local people, compensation for land acquired, and resettlement of affected people.

Following criticism of this compulsory acquisition policy, the EGoM, in April 2007, decided that no SEZ approvals would be granted if land belonging to even one individual was compulsorily acquired after April 2007.

This has not suited the SEZ lobby. The dilution of the rule being suggested is that state governments should be allowed to compulsorily acquire land if private developers have already procured 70% of the land.

To date, the Board of Approval has given the nod to 467 SEZs of which 225 have been notified. Some 135 zones have received in-principle approval but have not been able to acquire all the land needed.

Source: The Indian Express, July 25, 2008