Just what are SEZs? Are they a 'land-grab' scheme, or an attempt to 'colonise' the country?

Throwing new light on the 'special Economic Zones'. Ms Surekha Dalvi, guest speaker at the last meeting

There is something seriously wrong with the Special Economic Zones (SEZs) that the government is promoting. These SEZs are neither likely to earn foreign exchange for the country nor increase employment opportunities.

On the contrary, they will displace millions of people from their farmlands, aggravate the harm being perpetrated on natural resources and the environment, and offer far fewer jobs than being claimed.

As a matter of fact, one wouldn.t be far of the mark if one were to state that the SEZs were actually a massive .land-grab operation. which could result in the .colonisation. of a free and democratic country like India.

These acerbic comments were made in a simple but lucid manner by the guest speaker at the last meeting, Ms Surekha Dalvi, who was speaking on "Special Economic Zones" .

An advocate, activist and social worker who plunged into activism by opposing the Emergency of 1975/ 1977, she has preferred the rough and tumble of rural India rather than a cushy job in Bombay where she was born.

Ms Dalvi started by stating that she was totally opposed to SEZs and would present before her audience .the other side. of the story. She believed that SEZ did not mean Special Economic Zone but Special Exploitation Zone.

"I am a strong supporter of local people, of farmers, natives or sons of the soil, and I strongly oppose the SEZ policy (because of which) over the last one and a half years, the nation has been witnessing long-drawn- out struggles by farmers . from Nandigram to Raigadh and Gorai".

At the same time, she was not against development or against industrialisation. But if industrialisation had really been the raison d.etre of SEZs, then they would have been called Special Industrial Zones rather than Special Economic Zones.

When SEZs were discussed, all talk revolved round farmers. land, compensation, displacement, rehabilitation and so on. But whether or not agricultural land should be developed as an SEZ was not the only issue at stake'  Several other issues were also involved.

It was essential to also talk about the social, economic and "political and constitutional structures and principles adopted by Independent India".

For, ever since the debate on farm lands and SEZs erupted, farmers were painted as the villains of the piece and labelled as opponents of development, although this was not the case.

Besides, no one asked whether it was proper for private developers to take over SEZs or whether the government should have taken over their development.

Ms Dalvi said the SEZ Act came into existence in 2005 but the policy was declared three years earlier, in 2002 . and that had .happened in consistence (or consonance) with globalisation. and other related developments.

Another point to note was that the SEZ Act was passed by both Houses of Parliament in just two days . and this, even though other significant bills, such as reservation for women, the right to information, security cover for workers of the unorganised sector and so on, remained pending for many long years, some for ten years, others for twenty.

The SEZ Act was passed on August 10, 2005, and the rules under it framed by February, 2006. But even before that, the biggest SEZ in India had started coming up in Raigadh district.

That was the .Maha-Mumbai. project which had probably not even been sanctioned, Ms Dalvi said.

Government data now revealed that there was a big rush for new SEZs after the Act came into being and, in the last one and a half years many protests and struggles, some violent, had taken place across the country.

But nothing seemed to affect the government. It had set up a Board of Approval which had given (in principle) permission, as on January 8, for 193 SEZs; it had given approval for another 167 SEZs; and had more than 300 applications pending on its files.

In other words, more than 700 SEZs were going to come up in India.

Ms Dalvi recalled that she and her colleagues had got information about a private limited company, Gujarat Positra Infrastructure Ltd., purchasing land in Pen in Raigadh district.

That was the first time they came across the word SEZ. The year was 2003 and not 2005.

'The SEZ Act was passed by both Houses of Parliament in just two days' but many other important bills remain pending.

Another picture of the guest speaker at the last meeting, Ms Surekha Dalvi

on), the objectives mentioned in the Act were totally different from the actual intention . and even the implementation was totally different.

Ms Dalvi said the definition of "manufacture"  in the Act stated the following: "to make, produce, fabricate, assemble, process, bring into existence by hand or by machine, a new product having a distinctive name, character or use and shall include processes such as refrigeration, cutting, polishing, blending, repairs, remaking, re-engineering, and include agriculture, aquaculture, animal husbandry, floriculture, horticulture, pisciculture, poultry, sericulture, vermiculture, and mining".

But all these were businesses being conducted at present by the local people. How could these henceforth be treated as manufacture?

Similarly, under the Act the definition of export was "taking goods or providing services out of India from a Special Economic Zone by land, sea, air"; also, .supplying goods or providing services from one domestic tariff area to another are", that is, within the country itself, from one domestic area to another area.

Did this mean export? Besides, "supplying goods or providing services from one unit to another unit"- even this was treated as export?

Thus, the definition of "export"  was "funny or fishy". How could the government expect foreign direct investment to be brought in by companies based on such definitions?

Ms Dalvi said that she was wont to believe that the idea behind the SEZ scheme was a simple "landgrab operation" .

The SEZ Act said that the land required for setting up an SEZ could be in the range of 100 to 1,000 hectares. But it did not say anything about how the land would be obtained or from where.

It was clear, of course, that the company developing the SEZ would buy the land. But what if it was unable to buy the land? Then the government would acquire land for that company. And this was exactly what was happening in Raigadh district.

Finally, after a prolonged struggle waged all over the country, the government was forced to take a step back and was now talking about bringing an amendment in the land acquisition act and about a rehabilitation policy.

But even this was pending before Parliament.

As far as the State government was concerned, Ms Dalvi said, nothing seemed to affect it. It was impervious to people's fears and was going ahead with the acquisition process in Raigadh and many other districts, though in the name of government institutions.

The government has abandoned the individual farmer who does not wish to sell his land to an SEZ company, alleges activist Ms Surekha Dalvi

Not only MIDC, even MTDC and CIDCO were acquiring land. Put in another way, this meant that the government was acquiring land for SEZ purposes.

Returning to the theme of 1,000 hectares being the maximum limit for an SEZ, Ms Dalvi said the figure of 1,000 hectares was not the maximum, but probably the minimum requirement.

For, the "Maha-Mumbai" project was acquiring 45 villages admeasuring 11,000 hectares of land.

This was just one project and a total of 82 villages were to be acquired for seven SEZs in Raigadh district alone, she added.

Curiously, even though SEZ projects were being approved in the name of development, they were by no means coming up in underdeveloped or non-developed areas. Instead, all of them were located near Bombay, Pune, Raigadh and Thane -all urban areas where infrastructure was already available.

Did this not mean that SEZs were not for development, but only for ownership or the real estate business purposes of a particular company? And was it not thus safe to assume that it was all just a "land-grab"?

Picking holes in the argument that SEZs were going to generate a lot of employment, Ms Dalvi said past experience, specially with CIDCO, showed that the government never really rehabilitated the displaced people. Government records revealed that 75% of displaced people in the country were yet to be rehabilitated.

Returning to government claims and affirmations about displacement and land acquisition, Ms Dalvi said it was repeatedly claimed that the government was not taking over any villages and that it was not touching any fertile land.

"But what is fertile land? What is barren land? What is waste land? In waste-land villages, the landless in the community actually depend on the so-called waste land; it may be waste on paper, but it is not waste land in actual fact".

Further, the Act stated that SEZs would require "1,000 hectares of contiguous land".

But such vast tracts of contiguous land were simply not available anywhere in the country.

As for employment, already, thanks to globalisation, job opportunities in industries were going down. Many industrial units were shifting to other countries. As a result, all that would be left in India would be the service sector, IT, ITES, BT and pharmaceuticals.

These sectors would certainly boom in the SEZs - and these would give employment only to qualified, skilled and educated youth.

Basically, this was a match-up between an industrial economy and an agrarian economy.

When the government offered employment or compensation to displaced persons, it did so only to the landowner. But it ignored the fact that one farmer was usually backed by his entire family, as also several landless labourers, casual workers, village artisans and so on. But nobody gave any thought to these people, whose livelihood was also affected.

In the case of just one SEZ in Raigadh, 50,000 families would be displaced. But would all of them be employed in the SEZ? No, because an SEZ was not a company; it was only a developer. After development, if any company invested in it, only then would a business commence.

Ms Dalvi said the SEZ policy was already facing flak from the Finance Minister, the IMF, the Reserve Bank of India and others, thanks to all kinds of tax exemptions, financial concessions and other sops being offered.

Large-scale unjustified acquisition of land; inadequate resettlement and rehabilitation; inadequate opportunities for employment for local people through SEZs - all these were leading to loss of livelihood. "It is livelihood versus employment".

"When the price of land is increasing day by day and the price of money is decreasing day by day, how can such a transaction be justified?

"Thanks to special concessions and exemptions, SEZs will only increase the burden on natural resources and the environment.

"SEZ is not only a tax-free zone, but also exempted from legal bindings . therefore, it can also result in alienation of local communities from natural sources".

Ms Dalvi added that SEZs were now coming up in different areas, such as forest SEZs, tourism SEZs, energy SEZs and so on. She also pointed out that an SEZ was deemed a "foreign territory".

Thus, SEZs were actually creating real estate zones and promoting revenue loss to the country. And the burden would ultimately fall on the unsuspecting tax-payer.

Ms Dalvi wondered why, when there was so much talk about an impending food crisis, nobody was talking about setting up SAZs, or Special Agricultural Zones.

Instead, all kinds of exceptions and encouragements were being provided to capitalists to set up colonial townships rather than industrial townships.

She believed that this was a scheme to create a new Zamindari system; in a democratic country neither the government nor a company could be a zamindar. Yet, 1,000 hectares of land was being sought to be transferred to an individual owner.

Besides, the companies concerned were being given tax exemptions. In the first five years, there was a 100% income tax exemption on profit; for the next five years it would be 50%. But if they invested 25% of their profits in the country, they would get further rebates in the subsequent years.

This clearly meant that profit would be made but it would not be compulsory to invest it in India. The (bulk of the) profits could be invested anywhere in the world.

Thus, when 167 SEZs were sanctioned, the Finance Minister, Mr. P. Chidambaram, had pointed out a deficit (revenue loss) of Rs. 90,000 crores. Now, there were more than 500 SEZs.

As for SEZs being the panacea for all ills related to backwardness, Ms Dalvi pointed out that SEZs were not coming up in Bihar, Haryana or other backwards regions. Instead, they were sprouting in Maharashtra, a "progressive" State.

Even in Maharashtra, SEZs were not coming up in Latur, Yavatmal, Vidarbha or other areas where there were suicides by farmers, but in areas next to Bombay, Nashik, Pune and Raigadh.

"That is the main scam, as also the tax scam and the land grab scam, according to our experience".

What were the new "tactics" now being employed by companies in Raigadh district? Several bureaucrats, as also IAS officers and secretaries from Mantralaya, had shifted to the employ of private companies.

A Secretary carrying the files of five companies could be seen going to the Tehsildar.s office, asking for information, for sanctions and so on.

Giving another example, Ms Dalvi said one of the Chief Planners of MMRDA was now in the employ of a private company. He was using his network to get things done for his employers.

Where was the government as all this was going on? The government was standing with the companies. It had abandoned the individual farmer who did not wish to sell his land.

After the 76th Constitutional Amendment in fundamental rights, the property right had been excluded. .then how can one individual amass such huge property?... I can travel anywhere in the country, but how can a Development Commissioner stop me from entering an SEZ because it is a foreign territory?"

India abolished and merged about 500 princely states and empires with itself in 1947. In the "70s, Indira Gandhi abolished the erstwhile rulers. privy purses.

Today, thanks to government.s SEZ policy, a new class of landowners was being created . this was the new set of Zamindars, Ms Dalvi added.

First Lady Pervin Jehangir introduced the guest speaker, while the vote of thanks was proposed by Nandan Maluste.