West Bengal chief minister Buddhadeb Bhattacharjee is not known to mince his words. But his outburst against the Centre’s ‘mad rush’ for Special Economic Zones (SEZs) at the CPI(M)’s Coimbatore meet at a time when most political outfits are treading on eggshells on the issue was startling to say the least. Perhaps Mr Bhattacharjee was carried away by China’s success in setting up zones like Shenzhen, where a world-class infrastructure spread over 20,000 hectares exports far more than any of its Indian counterparts. We are a little more modest here in all departments with only 195 of 439 proposals granted being notified and in various stages of operation.
Sure, the apprehensions raised on SEZs are not very different from what the West Bengal Chief minister has raised. The massive tax breaks have triggered fears that they will end up as a real estate play. The politically contentious aspects of land acquisition, as seen in Nandigram, have also threatened to derail the entire effort to set up SEZs. Therefore, the Centre has sought to formulate guidelines for various states with regard to land acquisition. The first priority must be for waste and barren land and if necessary single-crop land can be acquired and so on. Mr Bhattacharjee, however, sees no option but to use only agricultural land in Bengal. The chief minister has also suggested there must be a clear policy on which industries should be granted SEZ status depending on the level of advanced technology and export potential. Further, that the actual land use pattern in the SEZ must be clearly formulated: as in Bengal, 50 per cent of the land must be for industrial use, 25 per cent for infrastructure and the remaining for other purposes. Now China may have flexible labour laws in their SEZs, but Mr Bhattacharjee feels that no SEZs can be allowed to bypass labour laws and the right to collective bargaining.
But SEZs are a reality in India. It is estimated that Rs 673 billion ($ 16 billion) in investments have been made in the already notified SEZs. The direct employment is for 61,015 persons with indirect employment potential being three times greater. The multiplier benefits derived from the investment and employment in SEZs will be greater than the potential tax revenue losses from the various exemptions being given. Maybe a day will come when all these various SEZs can coalesce and the whole country itself will become a SEZ.