SEZs or REZs (Real Estate Zones)?
What are SEZs likely to become in a few years’ time? According to a clause in the SEZ Act (Section 5(2)), as much as 75% of the area under large SEZs (above 1,000 hectares) can be used for non-industrial purposes. This lacuna in the law is likely to become a loophole for the accumulation of land banks by private developers and property dealers for the purpose of real estate speculation (this explains why so many of them have been buying areas for SEZs). In fact, it may well be the case that the rationale for the above clause in the SEZ Act is the uncertainty surrounding the economic attractiveness (and ultimate viability) of SEZs. If adequate productive investment is not forthcoming, the SEZ developer can at least cash in on the land value. Conglomerates like Reliance already own upwards of 100,000 acres of land in the countryside. Furthermore, the government has enabled Foreign Direct Investment (FDI) in real estate as of January 2007, leaving the door wide open for massive amounts of
