Land ceiling on multi-product SEZs may go

NEW DELHI: Developers with ambitions to build large special economic zones may have reason to smile. The government may lift the ceiling of 5,000 hectares applicable to multi-product SEZs on a case-to-case basis.

The decision will be taken once the new Land Acquisition Act gets Parliamentary approval, commerce secretary GK Pillai said on Monday. The move will have positive implications on multi-product SEZs of companies like Reliance and DLF, who were looking at huge SEZ facilities before the ceiling was imposed.

Speaking to the media after a session on SEZs at the India Economic Summit organised here by World Economic Forum and CII, Mr Pillai said since the relief and rehabilitation policy has now come into existence, the government may think of relaxing the upper limit of 5,000 hectares for SEZs. This would happen once the land acquisition law is enacted, he said.

Thirty-four multi-product SEZs have already been approved, out of which, three proposals were for holdings larger than 5,000 hectares. The developers, however, had to be content with 5,000 hectares. Those seeking larger areas include DLF, with its proposed 8,097-hectare Gurgaon project, Omaxe, with its 6,070-hectare project proposal in Rajasthan and RIL, with its Jhajjar SEZ in Haryana.

According to Mr Pillai, Mukesh Ambani’s Maha Mumbai project may not benefit from the move as the developers have not yet been able to acquire even 1,000 hectares. The 5,000-hectare ceiling was imposed by the empowered group of ministers of SEZs earlier this year in response to a agitations against land acquisition by state governments. The protests, primarily in Nandigram and Maha Mumbai, led to the formation of new relief and rehabilitation rules.

Mr Pillai said if the government decides to lift the ceiling, it would be done on a case-to-case basis. The government will have to be convinced that there is a need to go beyond 5,000 hectares because of a natural expansion in industrial activities, he said.

On the new relief and rehabilitation package, the secretary said farmers will be given the option of becoming stakeholders in the company that comes up on their land. He said exports from SEZs are likely to touch Rs 67,000 crore by the end of this fiscal.

FDI in SEZs during the past 18 months has touched $3 billion and is expected to go up three-to-four fold in the next one-and-a-half years, he said. By 2009-end, these zones would have created six lakh jobs.