The Andhra Pradesh government has extended a major dole to the Kakinada Special Economic Zone that has proven a non-starter for over five years now.
The state government has issued an order exempting the Kakinada SEZ from payment of fee for converting agricultural land for non-agricultural purposes, which according to official sources, could result in the exchequer forgoing a revenue of Rs 125 crore, including penalty.
The order by revenue secretary Rajeshwar Tiwari grants exemption for the SEZ, which covers an area of 8,321.67 acres.
As per the Andhra Pradesh Agricultural Land (Conversion for Non-Agricultural Purposes) Act, 2006, “every owner or occupier of agricultural land shall have to pay a conversion fee for (using farm land for) non-agricultural purposes, at the rate of 10 per cent of the basic value of the land.”
The Congress government had in 2004 acquired more than 7,000 acres of land at Rs 3 lakh per acre from farmers in Kothapalli and Tondangi mandals for the Zone that was to house a refinery. However, state-run ONGC, which had signed an MoU with the state for setting up the refinery, backed out saying the project was not economically viable.
Going by the prevailing value, the promoters are required to pay at least Rs 25 crore to the government as fee. If a penalty for non-payment of fee is added, the amount will be over Rs 125 crore. “But it’s a political decision taken at the highest level,” a top official said.
The official, however, added that such exemptions were part of the “policy to promote industries” in the state.
Interestingly, the land for Kakinada SEZ as notified by the Government of India is only 2,559 acres. But the state government issued the order exempting the SEZ promoters from paying conversion fee for 8,321.67 acres of land.
“All lands acquired through the Andhra Pradesh Industrial Infrastructure Corporation will get exemption from payment of conversion fee,” a senior official of the Industries Department pointed out.
The Kakinada SEZ - promoted by Kakinada Seaports Limited, ONGC and IL&FS - has been mired in controversy since inception because of alleged forcible acquisition of land from farmers. Of the 8,321.67 acres, more than 2,000 acres are fertile wet land in East Godavari district - the state’s rice growing belt.
