The Hindu Business Line : `SEZs not a threat to food security'

MR G.K. PILLAI, Union Commerce Secretary, is flanked by Mr Y. Harishchandra Prasad (left), Vice-Chairman and Managing Director of Malaxmi Group, and Mr R.Radhakrishna Murthy, Chairman, Electrical Engineering Division Board, at the "Yarlagadda Sreeramulu Endowment Lecture" in Hyderabad on Wednesday. — Mohammed Yousuf

Hyderabad , Nov 15

Acquisition of land for special economic zones will not have any impact on food security, according to Mr G.K. Pillai, Union Commerce Secretary.

"The 237 SEZs that have been given approval so far require only 34,510 hectares. This is just 0.000012 per cent of country's arable land. If such a small proportion of land is diverted to SEZs, how does it affect country's food security?"

Delivering the Yarlagadda Sreeramulu Endowment Lecture on `SEZ Act, Initiatives by Ministry of Commerce and the future of Indian economy' on Wednesday, Mr Pillai answered various criticisms related to SEZs.

He said that land acquired by the States for SEZs were not even 10 per cent of the total land they acquired for developing textile, pharma parks and roads.

Mr Pillai also said that SEZs were not at all real estate ventures as criticised by some.

To a query, he said that the Government would take up with the Reserve Bank of India the issue of treating banks' exposure to SEZs as exposure to commercial real estate sector. "It is not a real estate activity. They (the developers) cannot sell the land at any point of time."

Trigger effect

On the charge that SEZs would result in loss of taxes, he said the amount of economic activity in the zones would result in huge advantages, which would definitely dwarf the so-called losses.

On processing and non-processing areas in multi-product SEZs, the Secretary said that only 35 per cent of the area would be earmarked for processing.

The remaining area would be slotted for social infrastructure such as housing, roads and schools.

"These should be an integral part of SEZs. Otherwise, the onus would be on local Governments to provide those facilities for the staff working in the zones."

New export markets

Mr Pillai said that the Government would open up windows for exports to Africa, South America and CIS countries as part of the plan to achieve the $150-billion export target by 2009.

"We expect that the country could achieve $125 billion in this fiscal itself. We will achieve the target next year."

While ensuring electronic and hassle-free transactions, the Ministry would also reduce transaction cost for exports.