SEZ controversy continues to haunt Congress

The controversy over the creation of special economic zones continues to haunt the Congress, reports Saroj Nagi.

india Updated: Jan 27, 2007 00:01 IST
Saroj Nagi

The controversy over the creation of special economic zones (SEZ) continues to haunt the Congress, specially after Veerappa Moily’s "personal note" to the Group of Ministers warned that it could lead to a "great deal of displacement of people.. represent the creation of wealth in an enclave.. and create conflict situations" by escalating inter and intra state imbalances.

In his 16-page note to the Group of Ministers, the CWC member and Administrative Reforms Commission chairperson, urged the government to be "vigilant about the social costs and consequences of SEZs" and warned that the conflict situations could turn "ugly and nasty," embarrass the party and cost it heavy politically.

To remove the serious social, economic and conceptualisation issues involved in the scheme, Moily suggested that the Government rework the SEZ policy.

"We need to revise the land acquisition act and the rehabilitation policy," said a Congress leader who is in tune with what Moily dubbed as his "personal views." He, like Moily, noted that the land acquisition law in South Africa stipulates that no displacement should take place unless rehabilitation is provided.

Moily, alongwith AICC general secretaries Digvijay Singh and Ashok Gehlot, had met the GoM recently to give their views on the SEZ. While Singh and Gehlot expressed their views verbally, Moily chose to give it in writing.

Quizzed on it last week, the AICC had said that Moily's note was "not an internal party document" and the Congress had "neither commissioned nor received any report." Since then, Moily has also tried to project that he was for SEZs and wanted the process of setting them up hastened. His note, he said, had only underlined certain concerns and reflected his "personal views."

With 50,000 acres in 16 states on the block for acquisition, Moily favoured the Chinese model of creating large and self-sufficient enclaves that give importance to manufacturing so that SEZs create employment and encourage exports. He saw no need for giving concessions for creating SEZs and maintained that the state should be the ultimate equity holder so that no disproportionate equities are created. "It will be appropriate to have the SEZ projects in a public-private partnership framework," said Moily.

The SEZ issue was debated at the Congress chief ministers’ conclave in September 2006. Congress president Sonia Gandhi had spelt out the guidelines for it when she said that they should be set up on non-agricultural land and farmers be compensated adequately for it and perhaps even made stakeholders in the projects on the acquired land.

But in states like Punjab, there is no non-agricultural land - a fact that Amarinder Singh, chief minister, had pointed out then. Moily’s note also makes mention of it. Almost the total area is double-cropped, the irrigated area is more than 96% and cropping intensity is 188 per cent.

"Additional grains produced in this state would add to the marketable surplus and accrues to the foodstocks of the country. Any reduction in production affects the food surpluses adversely," the note said, adding that issues like these beg a solution if the SEZ scheme has to succeed.

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First Published: Jan 27, 2007 00:01 IST