BJP lauds move to revive SEZ policy, Cong-NCP not convinced

While the BJP has lauded the Finance Minister’s decision to revive SEZs, experts are not convinced.

Written by Shubhangi Khapre | Mumbai | Published: July 11, 2014 2:07 am
A live screening of the budget organised in the city by the Confederation of Indian Industry Thursday. A live screening of the budget organised in the city by the Confederation of Indian Industry Thursday.

The union budget promise to revive the special economic zones (SEZ) policy is being viewed cautiously by political parties as the model has failed in providing industrial and employment growth in the state. With over 140 SEZs that promised to provide employment to nearly 60 lakh people, the SEZ projects in the state were originally envisaged across 44,282 hectares.

While the BJP has lauded the Union Finance Minister Arun Jaitely’s decision to revive SEZs, experts are not convinced. The Congress and NCP which mooted the SEZ projects in 2006 and revised again in 2010, believes the Land Acquisition Act makes such projects unfeasible. State revenue minister Balasaheb Thorat said, “Land acquisition is a tedious and expensive process. For any industrial project to survive, it has to be economical. So, while promoting any new project, cost of land and time factor will be critical.”

Former Maharashtra Planning Board chairman Ratnakar Mahajan, who is also a Congress leader, said, “I believe SEZ is history. Any government trying to revive the SEZ (policy) is not going to achieve the very purpose for which it had been promoted.”

In Maharashtra, SEZs failed following protests related to land acquisition despite the government’s offer to release MIDC land which was already acquired ready to hand over to private players. Mahajan said SEZ was doomed as it does not earn government any revenue despite massive tax concessions to private players.

BJP state president Devendra Fadnavis said, “At the outset, the SEZ model is not to be faulted. It was the hidden motive of the Congress-NCP to acquire fertile agricultural land at throwaway prices from farmers to benefit private players and corporate houses which boomeranged. It was clearly a public betrayal that invited protest and thwarted the entire process of SEZ.” Fadnavis added, “The revival of SEZ would require corrective policy decisions to restore the confidence of the people in the project. If the real intent to set up industries and provide employment is adhered it will surely succeed. But why should any SEZs be selected in places keeping in mind the profit margin of private players? No project should ever be taken up discounting the participation and compensation of land owners and farmers.”

He said, “The policy corrections by the Centre will help in giving impetus to SEZs. And it should also be based on the local requirements of industries and employ local people.”

When the policy was implemented successive chief ministers —  the late Vilasrao Deshmukh, former chief minister Ashok Chavan and present CM Prithviraj Chavan — it was believed it would boost the industries and generate employment. The state leadership’s major concern was a rise in unemployment in state. And closure of small scale industries — around 3.5 lakh units — between 2008 and 2013
also had the administration worried.

The economic survey released on Wednesday shows Maharashtra is lagging behind Gujarat in employment generation. The economic survey of the Centre says, “The national average is 34 unemployed per 1,000 persons. In Maharashtra, it is 23 unemployed per 1,000 people. In Gujarat it is 8 unemployed per 1,000 people.”

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