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Get land first, then set up SEZs

Govt should have have first acquired land for industrial development before it decided on implementing the SEZ policy, says Godrej group chairman Adi Godrej.
Hindustan Times | By Suprotip Ghosh, Mumbai
UPDATED ON JUL 13, 2007 12:50 AM IST

Adi Godrej, chairman of the 110-year-old Godrej group, synonymous with padlocks, steel almirahs and refrigerators in India, is a stickler for punctuality. He was dot on time for a Coffee with HT session. “It took me just 20 minutes from my office at Vikhroli to Mahim. In fact, I had to ask my driver to go slow as I was afraid I would be early,” he said.

In a globalised world, the Godrej group, one of India’s oldest business houses, is embracing changes while remaining steeped in traditional business roots. Very soon, the group, which made padlocks and soap for many generations, will also help millions of Indians to colour their hair.

Godrej, chairman of the Godrej group, who spent the past couple of years selling unviable businesses and growing emerging ones, does believe in judicious use of time. He made this point loud and clear on his visit to the HT office on Wednesday.

But Godrej said he was not happy with the infrastructure development in Mumbai. “Many things are happening in Mumbai. Trouble is, most of these initiatives get bogged down in politics, in bureaucracy, in court action,” he said. He said that Mumbai needs a working mayor, or an executive mayor like most US cities and Chinese cities.

“In China, the four largest cities Beijing, Shanghai, ChongQuing and Xiangjing have the same model. We don’t have that model other than in Delhi. In the US too, mayors of the big cities are very powerful people,” he added.

Creating high rises by way of freeing FSI is the only way for Mumbai to accommodate all. And there is no meaning in avoiding it by saying there is no infrastructure, he said. “For every extra point of FSI you charge money which would go into an infrastructure fund,” Godrej added.

Godrej is developing a 55-storey residential complex in the central Mumbai mill land and has proposals for SEZ in its sprawling Vikhroli complex. “The Vikhroli estate has 100 acre of mangrove forest and that won’t be touched when the SEZ and other developments take place,” he added.

Godrej said having different tax regimes in different states is never good for a country. “We have special tax zones in Himachal, Uttaranchal and Kashmir and the north-east. And I think they have done a lot of good to India, he added.

On special economic zones, Godrej said the government should have have first acquired land for industrial development before it decided on implementing the SEZ policy. “This is how we built all our industrial estates in the old days. The government acquired land, called it an industrial estate, and then allocated land to private industry. Here you say so-and-so large company with huge assets is opening an SEZ and then the government goes and acquires farm land. I think psychologically and politically, is not right,” he added.

The Chinese set up only five SEZs, but they were very large. The largest, and oldest, Shenzen, is a huge city now, of 8 million people, he said. “So what they couldn’t do across the country, they started with five, and later on the entire country was reformed, so they did not need any more. So it matters little whether you have ten or hundred, if this land acquisition policy was not done with so much difficulty, everyone would have taken this as a good and positive thing, he added.

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