SEZ cap may force more govt spend on infra

Capping the size of special economic zones (SEZ) to 5,000 hectare may help governments quell social unrest caused by compulsory land acquisition for such projects. But it may force governments to create some of the infrastructure needed by such projects, said sources close to Mumbai SEZ Pvt Ltd, which is developing the country's largest SEZ in Raigad district of Maharashtra.

In an SEZ like Reliance Industries' in Raigad, which was to be spread over 10,000 hectare, the promoters had planned to develop a captive power plant of 2,000 MW, a residential complex for employees, sewage plant, water supply and transport systems, schools, a hospital, recreational facilities etc.

However, with the cut in its size, the promoter would not be able to develop all such infrastructure. It would have to ask the government to take care of some of the needs. Wanting to attract investment and create employment, the government would perforce have to spend money on such infrastructure.

Pointing out that Left parties were against capping the size of SEZs and disallowing state governments from acquiring land for SEZ projects, the sources claimed many state governments were of a similar view. Also, no industrial house would be able to acquire 5,000 hectares of land without a state government's intervention, they said.