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SEZ area may be unbound

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SEZ area may be unbound

You could ascribe it to the lobbying power of industry or the evolving nature of government policy but SEZ norms are in for amendments.
Amit Mukherjee
Print Edition: Dec 30, 2007

You could ascribe it to the lobbying power of industry or the evolving nature of government policy but SEZ norms are in for amendments. The prevailing norm, capping the size of SEZs, is up for review—the government now plans to do away with the 5,000-hectare ceiling that was set earlier this year.

Unbounding in store
The trigger: the newly-framed land acquisition policy. The government feels that the possibility of farmers getting short-changed in the new policy framework has vastly diminished. Hence, civil unrest is unlikely if large tracts of land are acquired by private parties.

Safeguards hold the key to interventions, it appears. Recently, the government effected a significant amendment to the SEZ norms to allow for stamp duty exemption. This, however, happened only after developers furnished bank guarantees of equivalent amounts.

The move is aimed at checking possible real estate irregularities, as the guarantees will be forfeited by the states in case the developer is unable to set up the SEZ before the deadline or fails to fulfil norms spelt out in the SEZ Act.

Given the scope of the SEZ policy as well the projects mooted by industry, Commerce Ministry officials are unsure of the final picture, when the 34 recently-approved multi-product SEZs actually take of. Optimism never did any harm.

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