New Delhi, September 25
Putting a virtual ban on the acquisition of prime agricultural land for special economic zones (SEZs) by the state governments, Union Commerce Minister Kamal Nath today said no proposal to set up any such zone on prime agricultural land would be cleared.

At the Congress chief ministers’ conference in Nainital last week, Congress president Sonia Gandhi had expressed concern over the acquisition of prime agricultural land from farmers to set up SEZs.

Talking to the reporters on the sidelines of a conference, Mr Nath said, “The Board of Approval for SEZs has made it mandatory that no proposal for setting up SEZs on prime agricultural land be cleared.”

He said the Central Government had told state governments to ensure that no prime agricultural land was acquired for setting up such industrial projects.

“As land is a state subject under the Constitution, the Commerce Ministry has written to the state governments that they should not get into land acquisition for private players,” he added.

He said he agreed with Ms Gandhi that no good farmland be diverted for industrial purposes. “Wherever possible, SEZs should come up only on wasteland or on ‘not very good’ farmland,” he said.

He also supported Ms Gandhi’s view that farmers whose land was acquired for such purposes be given stake in the industrial projects so set up.

Referring to the issue of land allotment to Reliance at a cheaper rate at the cost of farmers for setting up an SEZ, the minister said the state government should take notice on it.

Asked about the RBI decision to treat SEZs as similar to real-estate projects for lending purposes, he said the Central Bank had in its annual report applauded the SEZ scheme for accelerating economic development.

“The RBI in its report had itself termed SEZs as engine of growth. Now it must ensure that it does not contradict itself,” he said, referring to the RBI decision.

When asked whether RBI’s move would have any impact on SEZ developers, he said, “The industry will have to take up the issue with the RBI.”