Central Government De-notifies 516 Hectares from Kakinada Special Economic Zone

The Ministry of Commerce and Industry (Department of Commerce) (SEZ Division) issued Notification S.O. 4576(E) on September 27, 2022, which formally de-notified a significant portion of the Kakinada Multi-Product Special Economic Zone (SEZ) located in Kakinada, East Godavari District, Andhra Pradesh. This delegated legislation, published in the Gazette of India as an extraordinary notification on September 29, 2022, reduced the total area of the SEZ by 516.3049 hectares. The decision followed a proposal from M/s. Kakinada SEZ Limited, the developer of the SEZ, and received approval from the State Government of Andhra Pradesh. The de-notification specifically affects land parcels across Ponnada, Mulapeta, Ramanakkapeta, and A.V. Nagaram Villages. Consequently, the remaining area of the Kakinada SEZ now stands at 1136.7881 hectares. This action was taken in accordance with the powers conferred by sub-section (1) of section 4 of the Special Economic Zones Act, 2005 (an Act establishing special zones for economic activity), read with rule 8 of the Special Economic Zones Rules, 2006, after the Central Government was satisfied that all statutory requirements under sub-section (8) of section 3 of the Act were fulfilled. The notification came into force upon its publication in the Official Gazette.

The primary objective behind this de-notification was to facilitate the return of land to the respective farmers. The legislative intent, as articulated in the notification, highlighted that the de-notified land parcels would not be utilized for the creation of infrastructure, thereby failing to serve the original objectives for which the Special Economic Zone (SEZ) was initially conceived. An SEZ is a designated geographical area where business and trade laws differ from the rest of the country, primarily to encourage investment, boost exports, and create employment. The legislation provided: “...purpose of de-notification of the present proposal of 516.3049 hectares to return of the land to the respective farmers, as per G.O.Ms. No. 12 dated 04.03.2021. Hence, in such case de-notified parcel would not be utilized towards creation of infrastructure which would not sub-serve the objective of the SEZ as originally envisaged;” This move addresses a situation where land within a notified SEZ was not progressing towards its intended developmental use. The Kakinada SEZ was initially notified for 1013.64 hectares in 2013, later clubbed with other areas to form a larger zone of 2049.3088 hectares in 2016. Prior to this, the Central Government had already de-notified several other portions of the SEZ in 2017, 2018, and 2021, amounting to 121.43 hectares, 48.5715 hectares, and 226.2143 hectares, respectively. The current de-notification, recommended by the Development Commissioner, Visakhapatnam Special Economic Zone, ensures that land not contributing to the SEZ's core purpose is released, aligning with the policy rationale of efficient land utilization and addressing the concerns of landowners. This action does not introduce new rights or obligations but rather modifies the scope of an existing statutory framework by reducing the area under the Special Economic Zones Act, 2005, for specific land parcels.

Keywords: Kakinada SEZ, Special Economic Zone, de-notification, Andhra Pradesh, land return, Ministry of Commerce and Industry, SEZ Act 2005, land policy, East Godavari Geo Tags: India, Andhra Pradesh District: East Godavari