The centre has asked state governments to ensure that
no prime agricultural land is acquired for setting up
special economic zones. The union government has made
it clear to states that the centre would not clear any
SEZ proposal involving diversion of prime agricultural
Board of Approval for SEZs has made it mandatory that
no proposal for setting up SEZs on prime agricultural
land be cleared," commerce minister Kamal Nath told
reporters on the sidelines of a conference here.
said he totally agreed with Sonia Gandhi that no good
farmland should be diverted for industrial purposes, adding
that SEZs should come up only on wasteland or on not-so-good
farmland, wherever possible. However, he said, land is
a state subject and the commerce ministry has written
to state governments not to get involved in land acquisition
for private players.
president Sonia Gandhi had, at a meeting with chief ministers
of Congress-ruled states last week, warned against diversion
of farmland for non-agricultural purposes. She also had
sought "proper compensation" for land purchased
from the farmers.
government has so far approved 164 SEZs, which offer tax
relief and other incentives to companies, to try and spur
investment. Critics, however, say it could cost the exchequer
Rs 10,000 crore ($20billion) in lost revenues. Concerns
have also been raised that the zones are not large enough
to generate sufficient returns on investment, and that
the policy will do little to improve India's underlying
finance ministry has raised doubts about the financial
wisdom of the
policy. But the initiative, modelled on China's successful
approach to economic development, has attracted huge interest
among would-be developers.