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Friday, Sep 01, 2006

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SEZ who?

The hot topic of discussion among the business press in New Delhi is who would finally emerge victorious on the special economic zone (SEZ) issue — P. Chidambaram or Kamal Nath. As of now, Kamal Nath is clearly the winner having successfully got the Group of Ministers to lift the ceiling on the number of such zones that the country can have. But Chidambaram can take heart from an analysis done by a leading private consultant group. This group is of the view that of the 150 proposals cleared so far, most would fall by the wayside, particularly on the question of land acquisition.

Apparently, there is some court stricture that a State government cannot allocate parcels of land without going through the process of competitive bidding, which could be a major pitfall for companies planning massive SEZs.

The consultant also points out that India has cleared some 67 proposals for multi-product zones, whereas China, the pioneer in creating SEZs, has only six. Of these, two are reportedly doing very well while the other four would become successful a few years down the line. So, if China can do with six SEZs, why should India go in for 67, is the consultant's query. If his projections come true, Chidambaram may finally have a quiet laugh.

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