SEZification of India

By Murari Chaturvedi
The concept of special Economic Zone (SEZ) is not a new concept. In fact it is centuries old concept. An International Labour Organisation (ILO) report, states that some of the earliest reference of export processing zone dates back to thirteen century in Spain. In recent times, the first export processing zone was set up in 1959 at Shannon, in Ireland and in 1962 Puerta Rico established EPZ. In the Asia pacific region India was the first country to establish export processing zone at Kandla. These zones are known by different names such as free trade Zones (FTZ), Industrial Free Zone, Export Processing Zone, (EPZ), Bonded Free Zone, Maquiladoras(Mexico) and Special Economic Zones(China). All these zones are export oriented and enjoy concessions in taxes, duties and liberal labour laws, to compete in world market. The Government of India introduced a policy for SEZ’s on 1.4.2000. SEZ’s in India are formulated based on the China Model. SEZ’s in India are governed by the provisions of Special Economic Zones Act 2005 and Special Economic Zones Rules 2006. Currently there are 948 units in operation in 14 functional SEZ’s in India, providing employment to 1.10 lakh persons. Exports from SEZ’s has increased from Rs. 13854 crores in 2003-04 to Rs. 18309 crores in 2004-05. No doubt the SEZ’s are engines of growth and economy as such as it is a most welcome step taken by the government of India. China’s economic superiority is due to SEZ’s only. But one most important factor for SEZ’s is that they requires thousands of hectares of land. It is pertinent to note here that in China there is less cultivable land, but in India there is much more cultivable land. For the creation of SEZ’s the green acres must be spared. The SEZ revolution must not be allowed to gobble up agricultural lands. It is reported that the land grabbing spree is gaining momentum and even cultivable lands are being acquired. Thousands acres of farm land has been purchased from the farmer in Vishakhapatnam district, about 9,200 acres of land, mostly found , in Rambili and adjoining Achutapuram Mandals have already been acquired for SEZ and under phase II of acquisitions additional 10,000 acres of land has been ear marked. The biggest problem is of rehabilitation of farmers. Mere handsome compensation for their land is not enough. Here again those farmers who have land ownership document get compensation, but what about those farmers who are cultivating lands from decades or from generations, but do not have these documents. They are denied compensation. It is in human. Also a factor to be considered is that farmers tend to spend the compensation money in liquor and other such extravaganzas, and turn the labourers from farmers. The practical approach should to provide them alternate land plus some compensation for their shifting and settling and with enough money to start a life of their own.

Posted on 25th October 2006.

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