Emboldened by the trust vote win, the empowered group of ministers (EGoM) on Special Economic Zones (SEZs) is considering a proposal to dilute a crucial pre-requisite related to land acquisition that has held back physical progress in a large number of such zones that have obtained the government’s in-principle approval.

According to senior government officials, the EGoM scheduled to meet on August 7 after a long gap, will consider a proposal to let state governments compulsorily acquire land if private developers procure 70 per cent of the land required for the SEZ.

The crux of the problem is an April 4, 2007 decision of the EGoM that asked the Board of Approval under the Department of Commerce not to consider any case where land has been compulsorily acquired. The BoA has, so far, given formal nod to 467 SEZs, of which 225 have been notified. There are as many as 135 zones that have received in-principle approvals, but have not been able to procure the required land.

The officials said one of the biggest obstacles for developers has been the availability of large tracts of land because land holdings in India are highly fragmented. Another issue relates to the contiguity clause that requires developers to have a mass block of un-separated land to qualify for tax sops. “The BoA has been extending exemptions on a case-to-case basis for multi-product SEZs on the contiguity clause. Say, for instance, if there is a railway track in Jhajjar where Reliance plans an SEZ, it is not something the company can do about,” said an official.

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