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Safe SEZ: a guide

india Updated: Jan 01, 2008 21:17 IST

India’s experiment with Special Economic Zones (SEZ) has once again run into trouble. On Monday, Goa Chief Minister Digambar Kamat cancelled the notification to all approved SEZs in the state. The decision was taken after a panel, set up to study the viability of the SEZs, observed that these tax-free havens were not “right” for Goa’s development. It added that the proposed SEZs would not match the talent skills in Goa, would further burden the existing infrastructure and will not create any employment. Goa has three notified SEZs — a pharma hub and two other Information Technology (IT) and IT-enabled services (ITeS) ones. The state had also sought permission to set up seven more SEZs, and allotted over 1,500 acres of land through the Goa Industrial Development Corporation. The proposal came under fire after villagers alleged misappropriations in land sale to real estate majors.

The opposition is on three main issues: displacement from prime agricultural lands, access to water resources and large-scale migration from other states. Migration, the protestors believe, will upset the state’s harmony and create law and order problems — not to mention, put pressure on available resources. The other major reason, and this is common to anti-SEZ protests across the country, is the perceived role of the State in acquiring lands on behalf of industry. The State is seen as colluding with industry in ‘grabbing’ arable land and, thus, the livelihood of people. Considering that there is no data of the employment generated by SEZs with their thrust on IT, ITeS sectors, which are not labour intensive, such fears are understandable. While the people are losing land, the industry is perceived to be in a win-win situation with the tax breaks provided. UPA Chairperson Sonia Gandhi had expressed her reservations, saying that “prime agricultural land should not be normally diverted to non-agricultural uses” and called for satisfactory compensation to be paid when agricultural land is taken over.

The SEZs will only become attractive if the approach is inclusive. They will be attractive if the compensation is commensurate. Gujarat has shown how the process can be carried out effectively. But first, the State needs to be seen as a protector, not as an aggressor. The scramble among Chief Ministers for rosy figures will not take us anywhere, because figures seldom tell the true story. For the sake of the reputation of SEZs — not to mention the well-being of people — the State must understand this.