Reserved? SEZ Who?

Opposition parties like the BJP and Indian National Lok Dal, as well as the Congress MP from Bhiwani, Kuldeep Bhishnoi, said the 1,395 acres should be given to Reliance at prevailing market prices, estimated at Rs 60 lakh per acre. Although a showcause notice has been issued to Bishnoi by the state, he seems defiant. "I have asked the CM five key questions, but haven't got any replies. I am not against SEZs, but Reliance is going to set up a zone and then market the units within at market prices. So, if the state has acquired land at sarkari rates, it can't pass it on to a corporate at less than the market rates. We are not real estate agents,'' he says.

The villagers, who sold their land to the state earlier, are also incensed and have gone to the courts to get enhanced compensations. Their logic is that since Reliance is going to buy the additional land (over 23,000 acres) at market prices, they'll be at a disadvantage as they sold their land at much lower prices. So, they should be compensated for the difference in the two rates.

On June 19, Hooda clarified the interest of the farmers haven't been compromised. He said average land acquisition rates have been increased from an average of Rs 6.5 lakh per acre in prime Gurgaon locations in '04 to over Rs 20 lakh to the Garhi Harsaru farmers. "This reflected that the government was committed to safeguard the interests of the farmer," he added. State officials explained that HSIIDC, the holder of the 1,395 acres, has also benefited from the deal. Against the compensation of Rs 300 crore it paid to the farmers, it'll be paid Rs 360 crore by Reliance, which includes capitalised interest at 9 per cent and a 15 per cent administrative cost. In addition, HSIIDC would get sweat equity of 10 per cent in the proposed venture without having to pay a single paisa for it.

Besides the land-grabbing fear, the finance ministry had objected to services firms setting up shop in SEZs to avail of tax breaks. Sources say the changes will ensure services firms aren't allotted over 20 per cent of the available land. Also, old manufacturing firms which wish to move their plant to an SEZ to avail the tax benefits will be barred from doing so. Although the commerce ministry argued that even the existing firms need to move into SEZs to become globally competitive, and proposed that concerns regarding loss of revenues can be addressed by imposing a one-time entry levy, this was rejected. So were a lot of others.

In the end, what we'll see is a diluted version of the original policy. Despite this, it'll remain quite controversial if the job reservation clause is pushed through. Then, it'll be India Inc that'll openly oppose the SEZs.