Crowdfunding Countercurrents

Submission Policy

Popularise CC

Join News Letter

Defend Indian Constitution




CC Youtube Channel

Editor's Picks

Press Releases

Action Alert

Feed Burner

Read CC In Your
Own Language

Bradley Manning

India Burning

Mumbai Terror

Financial Crisis


AfPak War

Peak Oil



Alternative Energy

Climate Change

US Imperialism

US Elections


Latin America









Book Review

Gujarat Pogrom

Kandhamal Violence


India Elections



About Us


Fair Use Notice

Contact Us

Subscribe To Our
News Letter


Search Our Archive

Our Site



Order the book

A Publication
on The Status of
Adivasi Populations
of India




Land Acquisition Bill: Learning From SEZ Act

By Ashish Singh

23 April, 2015

In the beginning of the twenty first century Government of India decided to give more relaxation to the business community for several reasons. Among them, employment generation was a punch line. The background for this proposed change was that business ventures were unable to reap benefits as well as give back to society (?) due to strict regulations, multiple clearance systems and poor infrastructure. For that purpose the Government of India brought in a not-so-innovative but much hyped concept of Special Economic Zones in India. Now, another interesting debate which is taking form these days in India is about Land Acquisition Act. The proposed Land Acquisition makes it easier for the buyer to purchase any kind of land without much hassle.

Special Economic Zone (SEZ) is a notified piece of land with more liberal policies for the development of businesses within the territory of a nation-state. That is, businesses could reap faster if they acquire a license to operate in that territory. The Government of India brought in SEZ Act in 2006 broadening a horizon of possibilities for businesses to grow and develop. However, despite of what business tycoons claim in their fancy and well-presented proposals a report (titled “Performance of Special Economic Zones (SEZs) for the year 2012-13”) prepared by the Comptroller and Auditor General of India (CAG)gives us a narrative that can force us to think beyond the usual development- growth vocabulary. Given the time, when we are witnessing protests all across the country over the new Land Acquisition, Rehabilitation and Resettlement Bill (2015), it seems obvious to draw a parallel between these two.

The SEZ act 2006 carried similar easing traits as of LARR 2015 for businesses. Experiences draw a different picture though. There were country wide protests against land acquisition for SEZs pointing towards the need for having a social assessment while evaluating at aimed objectives.

The report number 6 of 2008 prepared by CAG pointed out several indirect tax deficiencies. The recent report (report number 21 of 2014) also carried out several eye opening facts. Big portions of land were lying idle in almost each state. Approximately 52% of the land allotted remained unused even though some lands were allotted in 2006. In Andhra Pradesh 48.29%, Gujarat 47.25%, Karnataka 56.72%, Maharashtra 70.05%, Odisha 96.58%, Tamil Nadu 49.02% and West Bengal 96.34% SEZ land remained idle. With maximum number of operational SEZs in Andhra Pradesh (36), Tamilnadu (28), Karnataka (22) and Maharashtra (19) stand on the second, third and fourth places. Category-wise IT/ITES have the maximum number of operational SEZs (91), in the mutli-product category 13 operational SEZs, in Biotech category 1, Pharma 9 and others 38. The reason for including this dataset is to show the paradox of developmental model we are witnessing in India, where on one hand government(s) keep complaining about not having enough resources to implement social security schemes and on the other, businesses are being provided with an environment that can increase their profits exponentially. Schemes like Mahatma Gandhi National Rural Employment Guarantee Act, despite of their loopholes, have managed to provide some benefits to rural unemployed population. There were signs in the budget to reduce the scope of such schemes. Another interesting fact one needs to note here is that the states, which have the predominance of special economic zones, are the ones where industries have gotten boost and a huge chunk of population lacks access to basic amenities.

The SEZ Act was in-acted with three main objectives: employment generation, increasing India's share in global exports and encouraging investment (both domestic as well as foreign). However the CAG report shows in the sampled 152 SEZs, there were incidences of non-performance seen in
employment (ranging from 65.95% to 96.58%), investment (ranging from 23.98% to 74.92%), and export (ranging from 46.16% to 93.81%). The ideal of having a balanced growth model could also not been actualized due to the fact that industries preferred urban areas for their business activities undermining the goal of balanced regional development. Out of 45635.63 ha of land notified in the country for SEZ purposes, only 28488.49 ha (62.42%) was used.

  • SEZ could not be notified even after a lapse of seven years in case of M/S IDCO Kalinga Nagar Odisha

  • SEZ was delayed by seven years in case of M/S Gopalpur SEZ, Odisha.

  • A subsidiary of AP Housing Board M/S Deccan Infrastructure and Land Holdings Ltd got approval to set up fourteen SEZs in different places of Andhra Pradesh covering 640.904 hectares land in 2008. Until 2012, after an extension, the developer could not fulfil the conditions for notification. No legal action was taken against it.











The CAG report points out that several developers approached the government for allotment and purchase of huge land pieces in the name of SEZ. These pieces of lands were de-notified a few years afterwards for purposes other than the ones mentioned in SEZ Act. Out of 39245.56 ha of land notified in the six States (Andhra Pradesh, Gujarat, Maharashtra, Karnataka, Odisha and West Bengal), 5402.22 ha (14%) of the land was de-notified to be used for commercial purposes. The CAG report indicates that several of these lands were acquired using ‘public purpose' clause; they certainly did not serve the objectives of the SEZ act. In four states (Andhra Pradesh, Karnataka, Maharashtra and West Bengal) huge amounts of loans (INR 6309.53 crore) were raised mortgaging SEZ lands. Of this amount three developer units used INR 2211.48 crore (35 % of INR 6309.53 crore) for purposes other than the development of SEZs.  Between 2006-07 and 2012-13, SEZs have received tax concessions leading to the amount of INR 83104.76 crore (Income tax- INR 55158 crore and indirect taxes of INR 27946.76 crore). The CAG reports says that there were several instances of in-eligible tax exemptions ranging to the amount INR 1150.06 crore (Income tax INR 4.39 crore and indirect taxes INR 1145.67 crore).

The CAG report also finds out that there were irregularities in the extension of formal approvals. The SEZ Act says that in order to get an extension a form C1 has to be submitted to the Development Commissioner. M/S Penninsula Pharma research center (formal approval date 25.10.2006) and M/S Wipro Ltd (formal approval date 25.06.2007) had neither filed form C1 nor were recommended by the Development Commissioner. M/S APIIC, Karakapatala Villages, Mullugu Mandal, Medak District, Andhra Pradesh (F.2/317/2006-EPZ) got formal approval on 26 October 2006. An extension till the period 25 April 2014 was granted on 27 June 2013 except for the period 26 Oct 2010 to 25 Oct 2011.

Let us try to understand the difference between the current and controversial LARR Bill of 2015 and the LARR Act of 2013. In the new bill, there is no approval required for schemes under these categories 1) defence, 2) rural infrastructure, 3) affordable housing, 4) Industrial corridors and 5) infrastructure projects including Public Private Partnership (PPP) schemes of where the central government owns a land; whereas the LARR Act 2013 requires that consent of 70% of the land owners to be obtained for PPP projects and 80% of the land owners to be obtained for private projects. The LARR Act 2013 requires doing a social impact assessment to identify affected families and calculate the social impact when the land is acquired. The LARR Act 2013 imposes certain restriction over irrigated multi-cropped land and agricultural land, whereas there is no such provision in the LARR 2015. In the LARR 2013, only those companies who are registered under Sec 3 of the Companies Act of 1956 could get permission to acquire land for private schemes; however as per the LARR 2015 any private firm which is working in collaboration with a non-governmental organization or any other organization can get a land for a private business. The LARR 2013 states that if the land remains unused for five years it should be either returned to the land owners or to the land bank, the LARR 2015 removes the time restriction of five year period. The LARR 2013 mentions that if an offence is committed by the government the head of the department will be held responsible unless he could prove that the offence was committed without his knowledge or he had exercised due diligence to prevent the commission of that offence; the LARR bill, however, replaces this provision and states that the officer cannot be prosecuted until the government puts a prior sanction. In a nutshell, the LARR Bill 2015 makes the environment for businesses not just very cosy but also gives them a way to creep in to people's lands without much hassle


Today when we are admiring to have cities like Shanghai and Sydney, should not we care about the hidden cost such development processes have? Providing space for businesses to grow is not always bad, but with so much at stake we must act carefully. Oh, let's not try to forget the examples SEZs have shown us so far!

Ashish Kumar Singh is involved with a youth-led initiate in Rae Bareli Uttar Pradesh. The organization is called Youth in Social Action. The organization try to ensure the active engagement of youths in the social development processes








Land Acquisition Bill

Special Economic Zones














Share on Tumblr



Comments are moderated