Track2Realty Exclusive: The problem remains that many SEZs are seen as real estate scams. Lack of clarity on the country’s land acquisition policy is also a major stumbling block for SEZ projects. EAS Sarma, former Secretary to the Government of India has alleged that most of the SEZs in the country have become real estate ventures lined to money laundering.
Sarma, in a letter to the Commerce Secretary, said, “Those who promote SEZs have gained the impression that they can violate any law of the land with the blessings of the politicians and the local authorities. The nexus among the SEZ promoters, the politicians and the officials has generated large amounts of black money, a subject that has attracted the attention of the highest court of the country.”
“Several of them (SEZs) have bypassed the environment laws of the country and have turned out to be sources of toxic pollution. Many are carrying on illegitimate activities surreptitiously and ironically, their crimes seem to get exposed, not by our regulators but the regulatory authorities abroad, as was the case with Visakhapatnam SEZ,” the former Secretary alleged.
SEZs have dealt a serious blow to agriculture and have become a threat to food security, Sarma said, adding that almost all the SEZs have resulted in dispossessing small farmers and fishing communities of their precious lands and their legitimate access to the sea. “By their very nature, SEZs represent ‘no democracy’ islands. Even before the setting up of an SEZ, no genuine public consultation ever takes place. Once set up, some SEZ promoters have denied access to the regulators,” he said.
SEZ developers have their own share of grievances. They crib the proposed land acquisition bill is further a dampener for the growth of the SEZs. “A comprehensive land acquisition policy should be put in place at the earliest. Without the state’s involvement it is difficult to get land even in the interiors of the country because of fragmented holdings and lack of proper records,” says Arun Nanda, Non Executive Chairman of Mahindra Lifespace Developers.
For example, in July last year the Maharashtra Government’s scrapping four SEZ projects emphasises the point. The abandoned projects – planned over 1,000 to 3,000 hectares – include a multipurpose SEZ by Indiabulls Infrastucture in Raigad district; Mahindra Lifespace Developers’ SEZ in Maval taluka of Pune; and two ventures by Videocon Realty & Infrastructure Ltd in Aurangabad and Pune.
The private companies simply failed to acquire the required land for these projects, a grim reminder of the not-so-distant past. In September 2008, the Maharashtra government had scrapped Reliance Industries’ grand plans for the Maha Mumbai SEZ in Raigad as 22 villages opposed the land acquisition for the project.
Next: Intent questioned, taxation dilemma with SEZs
