Upset over the Centre’s decision to put on hold all notifications and approval for Special Economic Zones till the National Relief and Rehabilitation policy comes into place and worried that big-ticket investors such as Nike will take their investments out of India if the SEZ uncertainty continues, two state chief ministers from within the UPA have urged the Central government to review the freeze urgently.

While DMK chief and Tamil Nadu Chief Minister M Karunanidhi has shot off a strongly-worded letter to Prime Minister Manmohan Singh urging him to “review the current decision to put on hold all SEZ proposals and facilitate immediate approval of pending proposals where land has already been assembled,” Congress’s Y S Rajasekhara Reddy, Chief Minister of Andhra Pradesh, has written to External Affairs Minister Pranab Mukherjee, who’s chairman of the Empowered Group of Ministers on SEZs, urging him to “allow notification of already approved SEZs with no pending land acquisition or relief and rehabilitation issues.”

While the fracas in West Bengal over the proposed SEZ in Nandigram has softened the Left parties’ opposition to the SEZ policy, Congress president Sonia Gandhi’s cautionary note on acquisition of agricultural land by state governments for SEZs has led to a freeze on notifications and approvals until the EGoM takes a final view. To allay concerns, the Prime Minister, in early January, promised that a “humane” rehabilitation policy would be in place in three months.

The uncertainty over the SEZ policy is making investors edgy and an estimated Rs 1,000 crore of Foreign Direct Investment has already been “lost” as foreign investors, partnering Indian SEZ developers, have abandoned their investment plans. These developers have already informed the Commerce Ministry that they will not be pursuing their “approved” projects.

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