Difference between revisions of "Special Economic Zones"

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Government Of India announced a comprehensive SEZ policy in April 2000 as a part of the EXIM Policy, which was followed by SEZ Act in February 2006.  
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The government of India had first announced a comprehensive SEZ policy in April 2000 as part of its EXIM Policy. It was shortly followed by the Special Economic Zone Act in February 2006.  
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<br>
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The act aimed to promote economic growth and development in the form of greater economic activity, promotion of investment, the creation of infrastructure, the growth of employment, and promotion of exports.
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<br>
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However, SEZs are a prime example of government land grabbing and over-reach of power. The country has witnessed several protests resisting land acquisition initiatives for SEZs.
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{|class="wikitable floatright" style="width: 33%
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|+ style="color:#2B3990;"|<ref>, Special Economic Zone - Vacant Land [http://www.sezindia.nic.in/writereaddata/GeneralNotifications/VACANT%20LAND%20AREA%20AVILABLE%20IN%20SEZs.pdf "CAG"]</ref>
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'''Land lying vacant as % of total SEZ land'''
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! scope="col" style="width: 15px;" | #
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! scope="col" style="width: 150px;" | State
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! scope="col" style="width: 100px;" | (%)   
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|-
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| 1|| Andhra Pradesh || 48
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|-
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| 2|| Gujrat || 47
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|-
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| 3|| Karnataka || 56
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| 4|| Maharashtra || 70
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| 5|| Odisha || 96
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| 6|| Tamilnadu || 49
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| 7|| West Bengal || 96
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|}
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There are more than 72,847 acres across the country that lies unused and vacant. SEZs promised cheap land prices and tax breaks. These easy incentives lead to land large tracts of land acquisition by private parties only to be abandoned later.
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The land is the most crucial part of the scheme - out of 1,12,768 acre of land notified in the country for SEZ purposes, operations commenced in only 70,396 acres (62.42%) of land.
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According to CAG<ref> Performance of Special Economic Zones [https://www.cag.gov.in/sites/default/files/audit_report_files/Union_Performance_Dept_Revenue_Indirect_Taxes_Special_Economic_Zones_SEZs_21_2014.pdf ]CAG, 2012-13 </ref>, out of the 392 notified zones, only 152 has become operational. In various states, the Developers had not commenced investments and the land had been lying idle in their custody for as long as 7 years. 
  
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This act aimed to promote economic growth and development in the form of greater economic activity, promotion of investment, creation of infrastructure, growth of employment and promotion of export.  
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Several processing areas established under the SEZ have unutilized land parcels locked. One such instance is the case of Adani Ports. Out of the notified area of 16,000 acres, only 2,060 acres was utilized leaving 13,934 acres un-utilized.  
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After enactment of the Act, the country has witnessed several protests resisting land acquisition initiatives for SEZs.  
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Refer to the map and the table accompanying for more details of this wasted land.
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Growth pattern of SEZs
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[[File:SEZ fixed 01.png|left|sub|middle|Map 1]]
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Among all the states of India, Andhra Pradesh boasted of operating maximum number (36) of SEZs in the country following Tamilnadu, Karnataka and Maharashtra. Over a period of time the growth curve of SEZs had indicated preference for urban agglomeration by industry, undermining the objective of promoting balanced regional development.Another significant trend in the SEZ growth has been the preponderance of IT/ITES sector and only 9.6 percent were catering to multi product manufacturing sector.
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Land allotment and utilization
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{|class="wikitable sortable" style="width: 50%
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Land is the most crucial part of the scheme.out of 45635.63 hectares of land notified in the country for SEZ purposes, operations commenced in only 28488.49 hectares (62.42%) of land. In terms of area of land, out of 39245.56 hectares of land notified in the six states,5402.22 (14%) of land was de-notified and diverted for commercial purposes in several cases. Many tracts of these lands were acquired invoking the public purpose clause. hus, land acquired was not serving the objectives of the SEZ Act.
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|+ style="color:#2B3990;"|<ref>SEZ, [http://www.sezindia.nic.in/writereaddata/GeneralNotifications/VACANT%20LAND%20AREA%20AVILABLE%20IN%20SEZs.pdf "CAG"]</ref>
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'''Special Economic Zones'''   
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! scope="col" style="width: 15px;" | #
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! scope="col" style="width: 150px;" | State
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Though the objectives of the SEZ id employment generation, investment, exports and economic growth, however, the trends of the national databases on economic growth of the country, trade, infrastructure, investment, employment etc. did not indicate any significant impact of the functioning of the SEZs on the economic growth.
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! scope="col" style="width: 100px;" | Area (acre)
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! scope="col" style="width: 100px;" | Value (₹ crore)
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Generation of employment opportunities, encouraging investment (both private and foreign) and increasing India's share in global exports were the important objectives of the SEZ Act. Performance of sampled SEZs (152) in the country indicated certain non performance in employment (ranging from 65.95% to 96.58%), investment (ranging from 23.98 % to 74.92%), and export (ranging from 46.16 to 93.81%).
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| 1||style="text-align:left;"|Chandigarh||style="text-align:center;"|84||style="text-align:right;"|170
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(Data Source : https://www.cag.gov.in/sites/default/files/audit_report_files/Union_Performance_Dept_Revenue_Indirect_Taxes_Special_Economic_Zones_SEZs_21_2014.pdf)
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| 2||style="text-align:left;"|Punjab||style="text-align:center;"|74||style="text-align:right;"|150
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| 3||style="text-align:left;"|Haryana||style="text-align:center;"|86||style="text-align:right;"|174
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| 4||style="text-align:left;"|Uttar Pradesh||style="text-align:center;"|513||style="text-align:right;"|1,038
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| 5||style="text-align:left;"|Rajasthan||style="text-align:center;"|8018||style="text-align:right;"|16,224
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land allotted for SEZs was misused and diverted. This is especially important in the light of the discussion happening around the Land Acquisition Ordinance of the NDA government.(Report number 21 of 2014 of the Comptroller and Auditor General of India (CAG) on Performance of Special Economic Zones (SEZs))
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'''Diversion of SEZ land for commercial purposes:''' 14% of land i.e., out of 39245.56 hectares of land notified in the six States. 10,5402.22 hectares was diverted for commercial purposes after de-notification. Many tracts of these lands were acquired invoking the ‘public purpose’ clause. Thus, land acquired was not serving the objectives of the SEZ act.
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| 6||style="text-align:left;"|Nagaland||style="text-align:center;"|123||style="text-align:right;"|249
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Restricted land allotted for SEZ activity: Nine (9) SEZs were allotted land which was restricted under various statutes (Defence, Forest, Irrigated land) in Andhra Pradesh, Maharashtra and West Bengal involving 2949.61 hectares of restricted land as detailed below.
 
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{|class="wikitable sortable"
 
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!width:10em| Nature of Land
 
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!width:10em| State
 
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!width:10em| Area of Land (in Hectares) Notified as SEZ
 
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!width:10em| Area of Land (in Hectares) Under restricted category
 
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!width:10em| Area of Land % of restricted land notified as SEZ
 
 
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| Defence land ||Andhra Pradesh || 80.93 || 29.54 || 36.5
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| 7||style="text-align:left;"|Jharkhand||style="text-align:center;"|39||style="text-align:right;"|79
 
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| 8||style="text-align:left;"|Madhya Pradesh||style="text-align:center;"|1213||style="text-align:right;"|2,454
 
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| Forest land ||Andhra Pradesh || 331.97|| 331.97 || 100
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| 9||style="text-align:left;"|Gujarat||style="text-align:center;"|12713||style="text-align:right;|25,724
 
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| Forest land ||West Bengal || 36.42|| 21.93 || 60.19
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| 10||style="text-align:left;"|West Bengal ||style="text-align:center;"|271||style="text-align:right;"|548
 
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| Irrigated land ||Andhra Pradesh|| 3587.38 || 2556.14 || 71.25
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| 11||style="text-align:left;"|Chattisgarh||style="text-align:center;"|93||style="text-align:right;"|188
 
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| Green Zone ||Maharashtra || 10.03 || 10.03 || 100
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| 12||style="text-align:left;"|Odisha ||style="text-align:center;"|753||style="text-align:right;"|1,524
 
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| 13||style="text-align:left;"|Dadra&Nagar Haveli||style="text-align:center;"|24||style="text-align:right;"|49
 
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| Total || || 4046.73 || 2949.61 || 72.89%
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| 14||style="text-align:left;"|Maharashtra||style="text-align:center;"|20461||style="text-align:right;"|41,401
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|}
 
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'''Loans raised on SEZ land used for non SEZ purposes :'''
 
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11 developers / units in Andhra Pradesh, Karnataka, maharashtra and West bengal had raised loans of Rs. 6,309.53 crore against mortgage of lease hold government land.CAG also noted that 3 out of the 11 developers/units had raised loans amounting to Rs 2,211.48 crore (35% of 6309.53 crore) against the notified SEZ land which are not put to use.
 
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'''Non fulfillment of leasing conditions by developer:'''
 
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A developer in AP was given land Rs 1 Rupee per acre per annum on the condition it can provide employment for about 60,000 people within 5 years of the commitment fulfillment date of Government of AP. As of March, 2013, only 11,737 people were employed (19.6% of the committed number).
 
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'''Approval of SEZ without required land use permission:''' SEZ was approved without carrying out the due diligence of verifying the title and usage of the land proposed by the developer.
 
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In M/s Sricity SEZ, Andhra Pradesh declared in its application that the land acquired and allotted by the Corporation shall be utilized for developing multi-product SEZ only. The Developer requested (February 2006) for 5442.5 hectares of land for establishment of SEZ out of which 3158.70 hectares was handed (May 2006 to December 2011) to Developer. The land was acquired at Rs 2.5 lakh per acre for dry land and Rs 3.0 lakh per acre for wet land. The Developer notified only 1538.12 hectares of land (September 2007 to April 2010) and further de-notified 449.54 hectares of land (October 2010 and November 2011). Thus land involving 2070.12 hectares of the total allotted land was not used for the intended purpose. In case of Essar Steel Hazira Ltd. and Reliance Industries Ltd, Jamnagar SEZs in Gujarat, the de-notified area stood at 247.522 hectares and 708.13 hectares respectively.
 
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'''Get a second approval despite failing to use the first SEZ land:'''
 
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For example - M/s Kakinada SEZ, Andhra Pradesh was granted formal approval for setting up of another multi product to the already approved SEZ in Kakinada on 1013.60 hectares of land in February 2012 even though the first SEZ measuring 1035. 66 hectares was not put to use.
 
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'''Underutilization of land in processing area:'''
 
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For e.g., in case of Adani Ports, out of the notified (May 2009) area of 6472.86 hectares, only 833.77 hectares was utilized leaving 5639.09 hectares (87.11 per cent) un-utilized so far.
 
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'''SEZ Land lying idle in Various States:'''
 
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According to the CAG, out of the 392 notified zones, only 152 have become operational. In various states, the Developers had not commenced investments and the land had been lying idle in their custody for 2 to 7 years.
 
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{|class="wikitable sortable"
 
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!width:10em| State
 
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!width:10em| % Of SEZ land lying vacant
 
 
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| Andhra Pradesh ||48.29 ||
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| 15||style="text-align:left;"|Telangana||style="text-align:center;"|9,318||style="text-align:right;"|18,854
 
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| Gujrat ||47.45 ||
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| 16||style="text-align:left;"|Goa||style="text-align:center;"|612||style="text-align:right;"|1,238
 
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| Karnataka ||56.72 ||
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| 17||style="text-align:left;"|Andhra Pradesh||style="text-align:center;"|8300||style="text-align:right;"|16,794
 
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| Maharashtra ||70.05 ||
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| 18||style="text-align:left;"|Karnataka||style="text-align:center;"|2567||style="text-align:right;"|5,194
 
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| Odisha ||96.58 ||
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| 19||style="text-align:left;"|Tamil Nadu||style="text-align:center;"|6765||style="text-align:right;"|13,689
 
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| Tamilnadu ||49.02 ||
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| 20||style="text-align:left;"|Kerala||style="text-align:center;"|820||style="text-align:right;"|1,659
 
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| West Bengal ||96.34 ||
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| scope = "row" colspan = "2" align="center" style="background:#f0f0f0;"|'''Total'''
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| align="center" style="background:#f0f0f0;"|''' 72,847 acre'''
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| align="center" style="background:#f0f0f0;"|'''₹ 1,47,401 crore'''
 
|}
 
|}
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Data Source: Report no.- 21 of 2014-Union Government (Department of Revenue-Indirect Taxes, Customs) – Report of the Comptroller and Auditor General of India on Performance of Special Economic Zones (SEZs)
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Information pulled from publicly available data sources points out about 72, 847 acre of land parcels are lying vacant and unused across the country.  
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<br>
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Another Problem
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This is roughly equivalent to 55,187 football fields. <ref> Size of a football field = 1.32 acre </ref>. With a conservative price of Rs. 5,000 / sq. metre and an FSI of 1 the value of this wasted land is Rs. 1.47 lakh crore.
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<br>
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The policies set out for SEZs proved to uproot thousands of communities across the country, only to lead to land locking and wastage.
 +
==References==

Latest revision as of 13:07, 24 October 2018

The government of India had first announced a comprehensive SEZ policy in April 2000 as part of its EXIM Policy. It was shortly followed by the Special Economic Zone Act in February 2006.
The act aimed to promote economic growth and development in the form of greater economic activity, promotion of investment, the creation of infrastructure, the growth of employment, and promotion of exports.
However, SEZs are a prime example of government land grabbing and over-reach of power. The country has witnessed several protests resisting land acquisition initiatives for SEZs.

[1] Land lying vacant as % of total SEZ land
# State (%)
1 Andhra Pradesh 48
2 Gujrat 47
3 Karnataka 56
4 Maharashtra 70
5 Odisha 96
6 Tamilnadu 49
7 West Bengal 96

There are more than 72,847 acres across the country that lies unused and vacant. SEZs promised cheap land prices and tax breaks. These easy incentives lead to land large tracts of land acquisition by private parties only to be abandoned later. The land is the most crucial part of the scheme - out of 1,12,768 acre of land notified in the country for SEZ purposes, operations commenced in only 70,396 acres (62.42%) of land. According to CAG[2], out of the 392 notified zones, only 152 has become operational. In various states, the Developers had not commenced investments and the land had been lying idle in their custody for as long as 7 years.

Several processing areas established under the SEZ have unutilized land parcels locked. One such instance is the case of Adani Ports. Out of the notified area of 16,000 acres, only 2,060 acres was utilized leaving 13,934 acres un-utilized. Refer to the map and the table accompanying for more details of this wasted land.



Map 1



[3] Special Economic Zones
# State Area (acre) Value (₹ crore)
1 Chandigarh 84 170
2 Punjab 74 150
3 Haryana 86 174
4 Uttar Pradesh 513 1,038
5 Rajasthan 8018 16,224
6 Nagaland 123 249
7 Jharkhand 39 79
8 Madhya Pradesh 1213 2,454
9 Gujarat 12713 25,724
10 West Bengal 271 548
11 Chattisgarh 93 188
12 Odisha 753 1,524
13 Dadra&Nagar Haveli 24 49
14 Maharashtra 20461 41,401
15 Telangana 9,318 18,854
16 Goa 612 1,238
17 Andhra Pradesh 8300 16,794
18 Karnataka 2567 5,194
19 Tamil Nadu 6765 13,689
20 Kerala 820 1,659
Total 72,847 acre ₹ 1,47,401 crore


Information pulled from publicly available data sources points out about 72, 847 acre of land parcels are lying vacant and unused across the country.
This is roughly equivalent to 55,187 football fields. [4]. With a conservative price of Rs. 5,000 / sq. metre and an FSI of 1 the value of this wasted land is Rs. 1.47 lakh crore.
The policies set out for SEZs proved to uproot thousands of communities across the country, only to lead to land locking and wastage.

References

  1. ↑ , Special Economic Zone - Vacant Land "CAG"
  2. ↑ Performance of Special Economic Zones [1]CAG, 2012-13
  3. ↑ SEZ, "CAG"
  4. ↑ Size of a football field = 1.32 acre
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