Nath favours lifting the cap on SEZ size

Less than a year after the empowered Group of Ministers had imposed a land ceiling of 5,000 hectare on Special Economic Zones, Commerce and Industry Minister Kamal Nath has strongly favoured lifting the cap stating many states want large sized SEZs.

"We are looking at it (the 5000 hectare land ceiling). There are some states who want large SEZs. One cannot have a port SEZ in Madhya Pradesh. Likewise one cannot have a similar policy in Kerala as you have in Madhya Pradesh. There cannot be a 'one-size-fits-all' policy in the nature of the our states," Nath said.

The empowered Group of Ministers, headed by External Affairs Minister Pranab Mukherjee, had imposed a 5000 hectare ceiling on SEZs last year following widespread protests over land acquisition.

The meeting of the eGoM, scheduled for February 4 to review the land ceiling was cancelled.

Lifting of the land ceiling would help big developers like Reliance Industries, DLF, Omaxe and Ascendas which had planned mega multi-product SEZs.

The Commerce Ministry had earlier submitted a proposal before the EGoM favouring relaxation of rules on land size arguing that concerns over displacement have been addressed in the legislation-backed resettlement and rehabilitation policy.

Asked why protests over land acquisition continued despite the Centre coming out with the R&R policy, Nath put the ball in the court of the states.

"States must ensure what they are doing is acceptable to the people. There is no issue in so many states on SEZ at all," Nath said adding the land issue was not restricted to the SEZs but concerned all the industries.

For instance, the Tata project in Singur in West Bengal was not an SEZ but faced protests.

"The Tatas' Nano project in Singur is not an SEZ....the same political party (CPI-M) in Kerala is putting up an SEZ. There is the same party in West Bengal. What are they doing?" he said.

Ruling out any changes in the SEZ policy, Nath said "there is nothing wrong with the policy".

Nath contested the Finance Ministry's contention that there would be big revenue loss on account of the tax-free enclaves.

He said the ICRIER study commissioned by the Finance Ministry pointed to the contrary. "I have the report and it says that there is revenue gain and phenomenal economic activity through the SEZs. It says SEZs have been one of the biggest engines of growth," Nath said.

He said over Rs 50,000 crore worth of investment has been made in the SEZs with direct employment of 150,000 people.

The government has so far given formal approval to 404 SEZs and notified 193 zones.