Following growing protests against land acquisition for special economic zones and industrial projects, the Cabinet has decided to rework the state's industrial policy.
At its weekly meeting on Wednesday, the Cabinet realised that the state's most favoured industrial zones such as Mumbai, Thane, Pune and Nashik, are nearing saturation and the government needs to take new industries to underdeveloped places if it wants to retain its place as one of India's most industrialised states.
The Cabinet decided to continue financial benefits to mega projects in rural areas, but reworked the eligibility criteria, fixed in 2005, for developed areas to make prospective investors opt for backward regions where land is abundant.
"We will come out with a comprehensive industrial policy later this year," chief minister Prithviraj Chavan said. "We will also take a call on special economic zones, which will be an important part of the new policy." Chavan said that the draft policy would be made public for suggestions and objections. Sources close to Chavan said that the state would try to smoothen land acquisition for SEZs and other industries.
The issue is significant for the state's development because the Reliance-promoted SEZ in Raigad has been scrapped because of lack of land. The state has approved 169 mega projects, of which 111 are in backward regions. The government expects an investment of Rs1.40 lakh crore and 2.15 lakh jobs to be created. Many projects are on shaky ground because of land issues.
The proposed SEZs in Maharashtra would need 1.60 crore acres of land. While SEZs planned on government land are making progress, the others have slowed down because of land shortage.
Deputy chief minister Ajit Pawar, who also heads the state's finance department, said that a change in policy was needed because some industries used legal loopholes to extract more benefits from the state. "Benefits such as tax holidays are completely legal but we realised that benefits needed to be long-term so that the state exchequer does not suffer in the short term."
Pawar advised investors not to worry about infrastructure saying that the state will be a "power-sufficient state" soon. He said industries would be provided power at discounted rates during non-peak hours.