Special Economic Zones (SEZ):India

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This is a collection of articles archived for the excellence of their content.

Diversion of land acquired for SEZs

CAG exposes profiteering in the name of SEZs

The Times of India Dec 03 2014

Several hectares of land acquired for special economic zones (SEZ) invoking public purpose were later sold off or used for other purposes, the Comptroller and Auditor General has found.

Among the groups that diverted land acquired for SEZs are Reliance Industries and Essar Steel, according to the audit report. In a report submitted to Parliament last week, CAG said SEZs of Essar Steel in Hazira and Reliance in Jamnagar in Gujarat de-notified an area of 247.522 ha and 708.13 ha respectively , and allotted them to ineligible (DTA -domestic tariff area) units.

In case of Sricity SEZ in Andhra Pradesh, the audit found that 2,070.12 ha of the allotted land was not used for the intended purpose. This de-notified land was allotted by the SEZ operators to private companies such as Alstom, Pepsico, Cadbury , Colgate, Kellogg's etc. “Land appeared to be the most crucial and attractive component of the scheme. Out of 45,635.63 ha of land notified in the country for SEZ purposes, operations commenced in only 28,488.49 ha (62.42%) of land,“ the audit said.

The audit found many developers approached the government for allotment purchase of vast areas of land in the name of SEZ. “However, only a fraction of the land so acquired was notified for SEZ and later de-notification was also resorted to within a few years to benefit from price appreciation,“ the CAG said.

In terms of area of land, out of 39,245.56 ha of land notified in the six states, 5402.22 ha (14%) of land was de-noti fied and diverted for commercial purposes in several cases, the audit found. “Many tracts of these lands were acquired invoking the `public purpose' clause. Thus, land acquired was not serving the objectives of the SEZ Act,“ the audit said.

As per SEZ Act, 2005, land for establishment of SEZs needs to be contiguous and the developer is required to have irrevocable rights over the land. Lands are being allotted by the state government directly or through land banks agencies on the basis of proposals made by the developers.