eGoM puts all SEZ clearances on hold
By TNN |
Highlights
NEW DELHI: In a setback to developers of special economic zones (SEZs), the empowered group of ministers (eGoM) has decided to hold back all clearances till the contentious issues-including land acquisition, rehabilitation and sectoral caps-are sorted out. The move has slammed the brakes on 174 SEZ proposals, including those of Infosys, Wockhardt, Claridges Hotels, Jindal Steel, Ranbaxy and Wipro, that had been formally cleared by the Board of Approval (BoA) and were not anticipating any roadblock. The 63 SEZs that have been notified, however, will not be affected.
The eGoM, which will now meet next month, also deliberated on imposing an export obligation on SEZ units-a point raised by finance minister P Chidambaram. According to sources, the finance minister said it is not enough if SEZ units are net foreign exchange earners, they should also undertake substantial export obligation. Mr Chidambaram feels that all SEZs should export at least 50% of their production.
With political opposition towards SEZs gathering steam, it seems unlikely that the matter will be sorted out soon. It is understood that the move to freeze all SEZ clearances was influenced by the growing protests over land acquisition by SEZs and the demand for better compensation to ousted farmers. Officials feel that the upcoming assembly elections in key states including Uttar Pradesh and Punjab is turning the situation difficult for the government to move ahead with establishment of SEZs.
While SEZ approvals are on hold, the Cabinet is expected to discuss a rehabilitation policy next week. The rural development ministry has already circulated a draft policy which offers better terms to farmers and other oustees than the existing provisions which are not binding.
The eGoM, which will now meet next month, also deliberated on imposing an export obligation on SEZ units-a point raised by finance minister P Chidambaram. According to sources, the finance minister said it is not enough if SEZ units are net foreign exchange earners, they should also undertake substantial export obligation. Mr Chidambaram feels that all SEZs should export at least 50% of their production.
With political opposition towards SEZs gathering steam, it seems unlikely that the matter will be sorted out soon. It is understood that the move to freeze all SEZ clearances was influenced by the growing protests over land acquisition by SEZs and the demand for better compensation to ousted farmers. Officials feel that the upcoming assembly elections in key states including Uttar Pradesh and Punjab is turning the situation difficult for the government to move ahead with establishment of SEZs.
While SEZ approvals are on hold, the Cabinet is expected to discuss a rehabilitation policy next week. The rural development ministry has already circulated a draft policy which offers better terms to farmers and other oustees than the existing provisions which are not binding.
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