Even as the Board of Approvals on Monday approved 28 special economic zones, central government officials said the recent referendum on Reliance Industries Ltd's proposed Navi Mumbai SEZ in Raigad district of Maharashtra is an issue that the state government and the company will have to deal with.
The officials also said that the ministry of commerce and industry had recommended the Maharashtra government to take back the land acquisition notification that it had issued.
The zone has been given in-principle approval by the BoA, as RIL is yet to acquire the requisite land.
"SEZs, for which the state government does compulsory acquisition, will not be approved by the Board of Approval.
The commerce and industry ministry had recommended the Maharashtra government to take back the land acquisition notification.
Because of this notification, land owners of the area cannot sell their land to any one, except the state government. This had led to resentment amongst farmers," said an official.
The Maharashtra government on Sunday had conducted a referendum -- the country's first on an industrial project - on whether the land owners in Raigad and its adjoining area wanted the proposed 5,000-hectare SEZ of RIL.
Commerce ministry officials maintain that the issue has to be dealt with by the state government. "If the state government wants, it can acquire land for the SEZ, but the BoA will not declare it as an SEZ.
Other developers like Bharat Forge and JSW have brought land with the consent of farmers and were formally approved," the official said.
Compulsory acquisition of land for SEZs was banned by an empowered group of ministers, headed by External Affairs Minister Pranab Mukherjee in April 2007, in the backdrop of widespread protests against the tax-free industrial enclaves.
"If RIL gets the land, it can come to the Board of Approval for formal approval. There have been instances when companies have withdrawn their application, when they could not acquire land," the official added.
Legal experts say Sunday's referendum may adversely affect RIL's plans for the ambitious SEZ. "Before notification of any SEZ, if the state government withdraws its approval to the zone, then the SEZ will have to be scrapped," said Hitender Mehta, head of Gurgaon centre of legal firm Vaish Associates.
Of the 28 SEZs, the Board today formally approved 18, which have land under possession, as well as granted in-principle approval to 10 zones, which are yet to acquire land.
Formally approved zones include Bharat Forge's 1,271-hectare multi-product zone in Khed, Maharashtra, which is likely to see investments in excess of Rs 5,000 crore (Rs 50 billion).
Moreover, the Board also formally approved JSW Bengal Steel's Rs 15,321 crore (Rs 153.21 billion) SEZ, spread over 1,804 hectares.
Among the SEZs that were given in-principle nod include L&T Shipbuilding Ltd's Rs 1,665-hectare heavy engineering zone in Tamil Nadu, as well as the 1,100-hectare multi-product SEZ to be developed by EMPI Vittal Centre, at a cost of Rs 11,340 crore (Rs 113.4 billion).