Kamal Nath overruled official to denotify Goa SEZs: Wikileaks

Panaji, April 18, 2013 (IANS)

Former union commerce minister Kamal Nath had overruled his ministry's
secretary and favoured denotification of three special economic zones (SEZ)
in Goa in 2008, suggest recently unclassified diplomatic cables available
on Wikileaks.

The cable from the US embassy dated Jan 4, 2008, titled "Centre appears to
waffle on Goa SEZ ban", also says that the decision to denotify the SEZs in
Goa could have hit the central government's plans for "foreign
participation in SEZs".

After a public outcry and several protests through 2006-08, the Congress
government in Goa at the time had decided to scrap seven land-intensive
SEZs and withdraw the state SEZ policy. Three of the seven SEZs were
already notified by the trade and commerce ministry and its secretary at
the time G.K. Pillai had ruled out their denotification because there was
"no such provision in law".

"However, (Goa chief minister Digambar) Kamat met with Commerce Minister
Nath the following day, whose public statements walked back from Pillai's.
Nath stated that the central government can de-notify SEZs and that it
would not wish to force a SEZ on a state that did not want them. Nath said
he would wait for the official request from the Goan government and take
'appropriate action'," the cable (number NEW DELHI 00000026 001.2 OF 002)
says.

The cable is part of a weekly compilation of "economic highlights"
dispatched back home by the US embassy in New Delhi.

After the withdrawal of the SEZ policy, promoters who were allotted land
for developing the Zones, have since approached the courts claiming the
government's move to cancel the policy was illegal. A judicial decision is
still pending.

Kamal Nath's decision at the time, the cable says, could have resulted in a
blow to the United Progressive Alliance (UPA) government's aim of getting
in foreign investments in SEZ projects.

"The Commerce Ministry's big plans for foreign participation in SEZs could
take a hit if the GOI (Government of India) capitulates to the Goa
government and approves de-notification after investors have already sunk
significant money, not to mention time, into their projects," the cable
comments.

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