Spreading protests from farmers arbitrarily thrown out of their land for below-the-market payments to create under-planned Special Economic Zones (SEZ) has prompted the government to suspend this policy. The SEZ policy is an important vehicle to scale the economy to the next level but {lack of adequate planning, process for rehabilitation, under-market valuation, etc. Problems with SEZ Policy has caused a major churn where small buildings with questionable economic value were being touted as a SEZ.

Recently, a Karnataka Minister was accused for promoting SEZs near his land holdings near the new airport. Other cases of nepotism across the country have incensed many owners who are easily disposed of their holdings for the benefit of a few politicians. Further, there are dubious proposals from some on SEZs for non-processing activities such as hospitals, housing, and hotels just to derive taxation benefits.

Thankfully, the Prime Minister’s Office seems to have intervened to halt the clearances. Acknowledging this issue, Commerce Minister Kamal Nath said that states proposing a project will have to tell the federal government “how the land will be acquired” and “what kind of land is going to be used for building SEZs.” As the champion of this well-intentioned but badly developed policy, he said that the next meeting of the empowered group of ministers (EGoM) led by External Affairs Minister Pranab Mukherjee would review this policy during their next meeting on January 22.

At that meeting, the Ministers are expected to review even those projects that have been granted permission but without commencement of work and severely affect a number of companies including Reliance Industries proposal for Maha Mumbai SEZ and Tata Group project at Gopalpur.