Ministry puts SEZ land scam fears to rest

In an attempt to remove the impression that special economic zones will lead to land scams, the commerce ministry today pointed out that 9,140 hectares of land, out of a total 26,880 hectares for the 150 approved zones, was already in possession of state industrial corporations.

According to the ministry, no fresh farm land has been acquired for the zones. Further, the 225 applications pending before the Board of Approval involve 75,000 hectares of land, which is only 0.000625 per cent of the 120 million hectares under cultivation in the country.

The ministry also said that since the decision of the empowered group of ministers to lift the cap on approving more zones, the number of applications has come down to just a trickle.

"We are now receiving just 2-3 applications per week," G K Pillai, special secretary in the commerce ministry, said. Recently, a ministerial group had said it should be consulted in the event of an inordinate rush of applications.

Pillai said the Board of Approval had made clear that no 'double cropped' land would be acquired for SEZs. He pointed out that the locals had benefited from the appreciation in land prices due to the zones.

"Nokia paid Rs 20 lakh an acre for acquiring land in Tamil Nadu. The same land, owned by the SIPCOT (State Industrial Promotion Corporation of Tamil Nadu) was earlier commanding just Rs 4 lakh per acre. The area around the zone is now understood to be commanding close to Rs 1 crore an acre," he said.

Pillai said that some companies like Bharat Forge in Pune were offering a job in the zone for each family which was being displaced on account of it.

Defending the decision to keep 35 per cent of the zone as processing area and 75 per cent as non-processing area, Pillai said the limit was far higher than the norm, which is usually around 12-15 per cent.

Pillai said the total employment in SEZs was likely to be 500,000 by December 2007, while FDI of between $5-6 billion was expected by them in infrastructure development and setting up of units.