Project monitor reported that the Kerala government has made it clear that it will not allow usage of agricultural land for new SEZ. This was the key feature of the new policy on SEZs.
The policy also states that private investors will not be allowed to acquire land for SEZs, but can apply for areas in the land being acquired by government agencies for setting up industrial parks. Kerala has also clarified that SEZs will not be exempted from paying electricity duty. All prevalent labor laws in the state would be made applicable to SEZs.
Land acquisition in Kerala could be a difficult proposition, considering the high density of population, large areas under paddy cultivation and the presence of water bodies. The coastal state with a geographical area of just 38,863 square kilometer is home to 3.18 crore people. This gives a population density of 819 people per square kilometer way above the national average of 324 persons per square kilometer.
Ostensibly due to land constraints, plans of setting up new SEZ in Kerala have been insignificant, particularly in the private sector. As of August 10th the number of SEZs notified in Kerala stood at just 8 relating to IT/ITES, port based services and electronics. At least 5 of these SEZs have been proposed by government companies like Kochi Port Trust and Kerala Industrial Infrastructure Development Corporation.