Acquisition of land for developing special economic zones (SEZ) continues to be a cause of concern, said the Economic Survey for 2007-08.

The government has advised state governments to give first priority to acquiring wastelands, and if only necessary, single-crop agricultural land, before handing them over to developers for a SEZ.

"If perforce a portion of double-cropped agricultural land has to be acquired to meet the minimum area requirements, especially for multi-product special economic zones, the same should not exceed 10 per cent of the total land acquired for the SEZ," the annual survey presented by Finance Minister P Chidamabaram in the Lok Sabha on Thursday said.

It also said the Board of Approval (BoA), which approves SEZ proposals, headed by Commerce and Industry Secretary GK Pillai, would not give its go-ahead to those SEZs that "have carried out or purpose to carry out compulsory acquisition of land for such SEZs after April 5, 2007".

The survey also expressed "apprehension" over a possible "misuse of the (SEZ) scheme and relocation of existing industries into SEZs".

The SEZ Act of 2005 that came into effect on Feb 10, 2006 sought to provide various incentives and tax sops to the units in a SEZ to attract large-scale domestic as well as foreign capital that would lead to employment.

The survey also highlighted that exports from SEZs have been surging, registering a growth of Rs 346.15 billion ($8.7 billion) in 2006-07 from Rs 228.40 billion in 2005-06.

So far, formal approvals have been granted to 439 SEZs, of which 195 have been notified and in various stages of operation. These are spread in 22 states and union territories and over 23 sectors, the survey said.