A Parliamentary panel has castigated the government for not establishing industries in almost half the SEZs set up since 2006 and giving the land to realtors, diverting fertile land of farmers.
The Parliamentary Standing Committee on Commerce said that though land was acquired for special economic zones "but no industries have come up there; only 154 SEZs have become operational out of 389 notified".
"Instead real estate business has become prosperous in the guise of SEZ and the rich fertile land of farmers were being diverted without bringing real development in terms of establishing industry or IT units," the Committee said in its report tabled in Parliament.
Asking the government to "check such a trend which defeat the objective of industrialisation and higher exports", it said such decisions also "deny the country of scarce cultivable land resources and impoverish the farmers".
Such a practice belies the employment opportunities for the people who were promised so while acquiring their land, it added.
It also raised concern over the denotification of special economic zones (SEZs), which is seen as a reflection of policy deficit in guiding the SEZs.
The Committee, headed by Shanta Kumar, noted that from December 2008 and till March 15, 2012, the Board of Approval on SEZ has approved 46 cases of denotification.
It asked the Department of Commerce to tighten the norms so that only genuine cases can get the approval.
The reasons for denotification ranges from economic slowdown, poor market response and imposition of Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) on SEZs, among others.
The requests for denotification considered by the BoA include those of DLF Ltd, Maytas Ventures SEZ Ltd, Essar SEZ Hazira Ltd, Unitech Infopark, Bata India, JSL Ltd and Satyam Computer Services.
The Committee recommended the government to check such a trend which defeats the objective of higher industrialisation and exports.
During 2011-12 fiscal, exports from SEZs grew by 15 per cent year-on-year to Rs 3.6 lakh crore.