Zones to take up more land than Delhi's

EGOM POLICY ON SEZS

The demand for land to set up special economic zones (SEZs) will intensify now that an empowered group of ministers (EGoM) on the zones has announced a new policy on the size of the land, and its use and acquisition norms.

A study of SEZs at various stages of approval suggests that they will need around 1,710 sq km of land "" larger than the size of Delhi, India's largest city, which is roughly 1,500 sq km.

Roughly half this, 875 sq km, will have to be set aside for core industrial activity. The EGoM yesterday decided to stipulate that 50 per cent of the SEZ land must be for industrial activity.

At present, the 63 SEZs that have been granted all approvals cover 67 sq km of land. The land to be brought by the 171 formally approved zones (i.e those that already have land in possession) is around 243 sq. km.

Another 160-odd zones that have received approval in principle (only 19 of which have land) will require 1,400 sq km. As many as 55 of these zones are multi-product. To qualify as multi-product SEZ, each such zone needs to have a minimum size of 10 sq km.

Overall, the total SEZ land requirement accounts for 0.05 per cent of India's land mass and 0.1 per cent of the country's agricultural land.

Now that the EGoM, headed by Foreign Minister Pranab Mukherjee, has stipulated that the state cannot acquire land for private SEZs, land prices are expected to increase significantly.

This is because the private developer will be forced to buy at market rates, unlike the state agencies. For instance, Haryana acquired land for a zone for around Rs 25 lakh per hectare, according to sources. In comparison, the market rate per hectare in the state is estimated at Rs 1 crore.