Developers of special economic zones (SEZs) have reacted promptly to the new resettlement and rehabilitation (R&R) policy, cleared by the Cabinet on Thursday, by asking for additional fiscal incentives. They say, this is in order to meet project cost escalation due to additional compensation to displaced families.
The new policy has also prompted developers to not depend on the government for procuring the necessary land to develop SEZs.
Convener of Export Promotion Council for Export Oriented Units and SEZs (EPCES) Ajay Nijhawan said, “The obligations of states, the Centre and developers will have to be studied. After assessing the additional cost, we would meet the government to ask them to consider giving us proportionate fiscal incentives, including excise and service tax exemptions”.
Pointed out that the R&R compensation amount was in addition to costs to develop an SEZ, he said, “Developers should also be given appropriate incentives to motivate them to undertake developmental activities sincerely.”
Nijhawan added that the Social Impact Assessment was a good step, as it is a must for developers to learn about the needs of the affected people and also to take them along in the development process. Experts also feel the provision, which gives displaced farmers the option to take up to 20% of the compensation amount in the form of shares, could be easily circumvented by builders by developing SEZs under subsidiaries that are not listed.
Pradeep Jain, MD, Parsvnath Developers, which is setting up many SEZs, said, “It is better to acquire land for SEZs on your own rather than take the government route. In a land acquired through negotiation, compensation issues do not arise as the price that we pay is more than the market rate.” Shibin Dudha, advisor (investments), Raheja group, said, “The policy is a major step forward in enabling faster economic growth through SEZs.”
A DLF spokesperson said, “It is better that the government acts as a facilitator and regulator. The extra cost incurred for compensation is immaterial when compared to the farmer’s cause, which is definitely more important.” Experts feel that the provision, which gives the displaced farmers the option to take upto 20% of the compensation in the form of shares, can easily be circumvented by builders by developing SEZs under subsidiaries that are not listed.
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