The auditor says the policy has ended up diverting huge tracts of land acquired for setting up manufacturing facilities and generating jobs to real estate projects.
The Comptroller and Auditor General of India (CAG) has trashed the Special Economic Zones (SEZs) Policy as it has ended up diverting huge tracts of land acquired for setting up manufacturing facilities and generating jobs to real estate projects for making a fast buck.
“We noted a trend wherein jasminlive developers approached the government for allotment/purchase of vast areas of land in the name of SEZ. However, only a fraction of the land so acquired was notified for SEZ and later denotification was also resorted to within a few years to benefit from price appreciation,” a CAG report tabled in Parliament on Friday stated. Land appeared to be the most crucial and attractive component of the scheme, it added.
The audit report found that the figures for employment creation, exports and economic activity being projected by the commerce ministry to push the policy were not properly verified and have turned out to be highly exaggerated. In terms of area of land, out of 39,245.56 hectares notified in the six states (Andhra Pradesh, Gujarat, Karnataka, Maharashtra and West Bengal), 5,402.22 hectares (14 per cent) was denotified and diverted for jasmine live commercial purposes in several cases, it said.
Many tracts of land acquired are not serving the objectives of the SEZ Act, the report said.
In Andhra Pradesh, Karnataka, Maharashtra and West Bengal, 11 developers had raised Rs 6,309.53 crore of loan through mortgaging SEZ lands. Out of which, three developers had utilised the loan amount (Rs 2,211.48 crore) i.e 35 per cent, for the purpose other than the development of SEZ as there was no economic activity in the SEZs concerned.