The central government on Wednesday said that state governments do not have the power to scrap notified special economic zones although they can seek cancellation of those that are in the pipeline.
"There is no provision under law (for states) to recommend de-notification. They have no locus standi to withdraw the notifications to the SEZs," Commerce Secretary Gopal Pillai told reporters when asked about Goa government's decision to scrap all the upcoming SEZs in the state.
He, however, said except the three notified zones, there should be no problem about other projects as the Centre would like to honour the sentiments of the state. Those notified have become legal entities and cannot be de-notified, he said.
The three SEZs -- Cipla's Meditab Specialities, Peninsula Pharma Research Centre and K Raheja Corp -- have acquired land. About Rs 500 crore (Rs 5 billion) has been invested by Meditab in its SEZ.
"Duty-free equipmenthas also started coming in. . . how will the state government compensate the developers," Pillai said. Developers may even approach the court against the decision of the Goa government, Pillai, who also heads the board of approval for SEZs, said.
The Goa government had on December 31announced scrapping all the SEZs following protests by political parties, including the ruling Congress and the opposition BJP. So far, at least ten SEZs have been approved in the state.
Goa Chief Minister Digambar Kamat had said his government would take up the matter with the Centre to de-notifythe three SEZs. There have been protests against SEZs in several states, including West Bengal, Maharashtra and Haryana, but Goa is the first Congress-ruled state to have gone back on the SEZ policy.
Interview with G K Pillai: Why SEZs are good for India