The state governments will be allowed to acquire a maximum of 10 per cent of the total land area allotted for a special economic zone for purposes of contiguity, according to a top source in the rural development ministry.

The proposal is part of the new rehabilitation policy which is being given final touches by the Prime Minister's Office.

The PMO has made 'substantial changes' in the policy, which has been drafted by the ministry. The policy has gone to the law ministry for vetting and is likely to be placed before the Cabinet for approval in the next few days, sources say.

While reducing the role of the government to the minimum, the policy will put the onus of land acquisition on private players. "However, if the issue of contiguity is involved, the private firm should acquire at least 90 per cent of the land before approaching the government," a source said.

This means that the state government would not acquire more than 10 per cent of the land required, the source added.

India's great rush for SEZs

"Primarily, the government will not have any role in land acquisition for any industrial purpose except for government projects and development programmes. The state can step in to acquire land which, if not a part of the SEZ, can stall the whole project," an official said.

Speaking to Business Standard, Rural Development Minister Raghuvansh Prasad Singh said, "Our intention is to provide rich rehabilitation to people who lose land to industry. Care will be taken that only voluntary displacement occurs and that force is not used under any circumstances for acquisition of land in the country."

The issue of ceiling on area to be acquired for the projects is not mentioned in the rehabilitation policy. "We are not dealing with that aspect. The ceiling issue will be dealt in the SEZ policy," Singh said.

"We have sent the draft to the law ministry and expect to put it before the Cabinet in a few days," Singh said.