People's Democracy

On SEZs: Don’t Proceed Without Changes in SEZ Act and Rules

The Polit Bureau of the Communist Party of India (Marxist) issued the following statements on April 6, 2007

THE changes in the Special Economic Zones Policy suggested by the empowered Group of Ministers is totally inadequate and falls far short of what is required. First of all, the eGoM has left the exorbitant and unjustified tax concessions intact. By this, the Government of India stands to lose tens of thousands of crores of rupees in revenue. The iniquitous tax bonanza was one of the basic problems with the SEZ Act and Rules. Without revising these tax concessions the SEZ concept will not find acceptance.

The eGoM has not looked at the proliferation of SEZs. There is an urgent need to review the type of industries to be set up in SEZs and apply sector wise caps on SEZs. Moreover, the allowance of maximum of 5000 hectares (12500 acres) for multi-product SEZs is uncalled for. The minimum size of 1000 hectares (2500 acres) for the multi-product SEZs has also not been lowered. The CPI (M) is of the firm view that a multi-product SEZ should have a minimum size specified of only 400 hectares (1000 acres) and there should be a ceiling of 2000 hectares (5000 acres).

The CPI (M) does not agree with State governments not being involved in acquisition of land, particularly for those of a larger size. Allowing corporates to buy large tracts of land for SEZs will put small farmers, tenants and agricultural workers at the mercy of land sharks. Moreover, private entities would be able to own, rather than lease, thousands of acres of land subverting Land Ceiling as well as Town Planning Laws. There has to be State intervention to ensure that if any land is being bought, the farmers and others working on land get a fair price. In the absence of any changes in the Land Acquisition Act and a rehabilitation policy which can be legally enforceable, the license being given to corporates to buy land on a large scale will be harmful.

The eGoM has ignored the comprehensive suggestions made by the Left parties. The UPA government should realize that political parties across the board have come out against the present SEZ Act and Rules. The Standing Committee on Commerce is also studying the entire issue. The Government of India should await the recommendations of the Standing Committee on Commerce and reexamine the whole matter rather than taking piecemeal decisions on SEZs.

If the government proceeds with the SEZs in the present form, the matter will have to be taken up in parliament so that the demand for amendments to the SEZ Act and Rules can be dealt with there.