While the basic framework of policies under which SEZs will operate is ready at the Central level, much needs to be done at the state level to make these policies operational on the ground. A survey conducted by the Export Promotion Council for Export Oriented Units and SEZs (EPCES) Panel of SEZ Developers has identified several policy-related and operational issues that need to be addressed so that SEZ developers can implement their projects faster.The first issue pertains to the determination of the price at which state governments should acquire land. For land acquisition, state governments notify several sections of the Land Acquisition Act. Under Section 4, the state declares its intent to acquire land. Under section 5(A), it invites objections to the acquisition, and under Section 6, it determines the area to be acquired and the compensation to be offered. The survey conducted by the EPCES Panel of SEZ Developers has led to the suggestion that during the period between notifying Section 4 and notifying Section 6 (which takes about one year), developers should purchase land directly from land owners at market price. Said Ajay Nijhawan, convenor of the EPCES Panel of SEZ Developers: “This process will enable the market price of land in the area to emerge. This price, along with the government determined price, should provide the best price at which the balance land should be acquired by the government.” Most developers surveyed by EPCES Panel favoured that the land acquisition rates paid by the government should equal the market price. The second issue pertains to passing the necessary legislation pertaining to SEZs at the state level. According to Nijhawan, “While the central government has enacted the SEZ Act of 2005 and the SEZ Rules of 2006, the states too need to pass their own State SEZ Acts.” Till date only Gujarat, Haryana and West Bengal have enacted their State SEZ Acts. Maharashtra has so far prepared a draft SEZ bill. Only when the states pass their own SEZ Acts will several provisions become operational, including exemptions granted to industrial establishments under existing central Acts. Some of the issues that would be sorted out with the passing of State SEZ Acts and associated regulations include the establishment of a committee at the state level for clearing SEZ proposals.States yet to act• Price at which developers acquire land should serve as a price discovery mechanism for acquisition by the state government•Majority of state governments have yet to pass their own state SEZ Acts• Many of the exemptions granted to SEZ developers and occupiers by the Centre will not become operational till the states pass their own SEZ Acts• Proper authorities at state and SEZ levels need to be established• Infrastructure must be provided
