AEZs fail to take off as govt goes slow on investment

Unlike special economic zones (SEZs), agri export zones are not based on any particular plot of land with physical boundaries. AEZs relate to agro-climatic regions known for growing speciality crops. It envisages integrated development of the region through development of needed infrastructure like roads, storage, transport and processing and value addition facilities. Since 2001, the plan has grown to around 60 AEZs in 20 states.

Five years on, the Central and state governments have dragged their feet on fulfilling their promised share of investments. Nor have they actively engaged the private sector to put the infrastructure in place. As per initial criteria, investments by the central and state governments and the private sector was to be in the 1:1:2 ratio. Accordingly, the total investment for 60 approved AEZs was estimated around Rs 1718 crore. Against this, the total flow of investment till date is only around Rs 811 crore.

The AEZs could achieve about 50 per cent of the export target of Rs 11,821 crore over five years. “There is a lot of under-reporting by the state governments...We have received a figure for five years’ exports from AEZs at only Rs 5,185 crore. This should be much over Rs 6,000 crore,” a commerce ministry official said.

The ministry’s review group has castigated both central and state governments in fulfilling their investment targets and encouraging the growth of AEZs.

“Government should encourage AEZs which promotes integrated rural development and scrap SEZs which usurp farmlands and cause a revenue loss of millions of rupees on account of fiscal sops extended to them,” Dr Krishan Bir Chaudhary, leader of Bharat Krishak Samaj, said.

Exporters, on the other hand, say majority of the investments have been by the private sector; much more needs to be done for storage and processing facilities.

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