Opportunity for Review of the SEZ Policy

A previous discussion on this blog (Law and Other Things: SEZs: The Furore Over Land at Nandagudi) had highlighted the need for a review of the Government’s policy on SEZs.

It has been reported in the press today (Panel no to new zones till Act amended, Joshi panel seeks freeze on SEZ clearances) that a Parliamentary Standing Committee on Commerce headed by Murali Manohar Joshi has submitted a report to the Government calling for a freeze on approval of new SEZs unless the entire policy on SEZs including the SEZ Act are reviewed. This comes in the wake of demands from various quarters for a need to take a relook at important concerns such as land acquisition and rehabilitation of displaced land-dwellers.

This provides a timely opportunity for the Government to review the entire policy on SEZs, which has been affected by controversies throughout the country. From and law and policy standpoint, an important aspect relates to land acquisition, where various options are being explored by the policy-makers: (i) have the Government acquire the land (for example, under the Land Acquisition Act); or (ii) have the private developers of the SEZs acquire land directly from the land owners by the process of negotiation without any Government intervention.

As we have discussed on this blog in the past, neither presents a workable solution. What is required is acquisition with full consent of land owners. However, the Government needs to play a supervisory role to ensure that land owners (who, in the case of a large number of SEZs happen to be illiterate or semi-literate farmers) are not shortchanged. These, among other issues, need to be considered in full before the policy and the Act on SEZs is amended. Press Reports suggest that the Commerce Ministry will have to submit an action-taken report on the findings of the Parliamentary Committee.

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