Evaluate whether BHAVYA's challenge-mode, equity-linked model addresses the shortcomings of India's SEZ experience.

India's SEZs, set up under the SEZ Act, 2005, depended on tax incentives. Even so, CAG's 2014 performance audit found large areas of notified land lying idle, and some land de-notified for commercial use [1]. BHAVYA plans 100 plug-and-play parks with an outlay of ₹33,660 crore [2]. It replaces incentives with infrastructure that is competitively selected and backed by central equity. This corrects the SEZ design, but it leaves the land problem only partly solved.

Shortcomings BHAVYA addresses

• From discretion to competition: Phase 1 selects up to 50 parks in challenge mode. Bids are scored on connectivity, site suitability and ecosystem strength [3]. Under SEZs, developers chose sites and the government notified them.
• From tax breaks to equity: Central equity is tied to the value of land transferred to the SPV and to project milestones [3]. The Centre shares the asset's risk instead of giving up revenue, which discourages speculative land-holding.
• From weak accountability to a traceable chain: Parks are run by SPVs under the Companies Act, 2013 [3]. The BHAVYA Portal handles appraisal and monitoring [4].
• From bare plots to ready ecosystems: Parks come with shared infrastructure already built. The NICDP cities show that firms respond once this exists: about 229 plots (~1,601 acres) were allotted once trunk infrastructure was in place [5].

Shortcomings that persist

• Land is still the bottleneck: States supply the land under a 51:49 NICDC–State model [4]. The NIMZ scheme was built the same way and stalled: only three zones got final approval [6]. Challenge mode rewards States that already have land ready. It does not help the ones that lag.
• Building is not the same as filling: The milestones mostly track construction. So the idle-land risk that CAG flagged [1] remains.
• Supply-driven siting: The World Bank warns that a "build it and they will come" approach fails [7]. Small parks in remote regions face the most risk.
• Thin funding: The average is about ₹337 crore per park [2], so not every park can match corridor-city quality.

Overall, BHAVYA fixes the SEZ model's design flaws (discretion, reliance on incentives, weak accountability) but only partly fixes its execution flaw of idle land. Four steps would complete the shift: tie later equity instalments to occupancy, require dispute-free land before each challenge round, add "use-it-or-lose-it" clauses to leases, and publish each park's occupancy on the portal. Together they would make BHAVYA a model of cooperative federalism that also advances SDG-9 on resilient industrial infrastructure.