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June 17, 2007
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June 17, 2007




Page: 26/33

Home > 2007 Issues > June 17, 2007

Controversy

SEZ: UPA promoting land grab, alien territory

SEZ developers and units established in SEZs have been granted various exemptions including exemptions from state and local taxes, tax on electricity, exemption from income tax for ten years, exemption from import duty, service tax, etc. They have also been ensured sufficient availability of water and electricity.

Though there is a provision to assess the impact of SEZs on environment, SEZs have been exempted from the provision of public hearing and the land-use declaration. In case of offence of non-compliance with environ-mental laws, units in SEZs cannot be directly booked and there is a condition to get prior permission from the SEZs authority.

Recently a large number of unarmed poor farmers were slained to death by West Bengal police and CPM cadres in Nandigram. Whether it is Dadri or Mumbai, attempts are being made to crush farmers? movements by the governments concerned, giving a damn to democratic norms. The question arises, why democratically elected governments are doing so. A simple answer is, declared commitment of the governments to establish foreign territories on Indian soil in the name of Special Economic Zones (SEZs).

According to Foreign Trade Policy (2004-09), ?SEZ is a specifically delineated duty-free enclave and shall be deemed to be foreign territory for the purposes of trade operations, duties and tarrifs.? The Andhra Pradesh Industries and Commerce Department defines SEZ as ?specifically delineated enclave treated as foreign territory for the purposes of industrial services and trade operations with relaxation in customs duties and more liberal regime in respect of other levies, foreign investment and other transactions.?

If we read different policy directions and government orders with other provisions on SEZ, a very horrifying situation emerges. According to the resolution no. SEZ 2001/152/IND-2 the Government of Maharashtra ensured, ?The government will take necessary steps to declare SEZs the industrial townships functioning as self-governing autonomous municipal bodies.? It is clear that SEZs will be an autonomous self-governing territory where the SEZ developer will rule and there will be no role of democratically elected government. What will happen to integrity and sovereignty of the nation when such foreign territories are established? At the time of Independence there were 600 princely states ruled by rajwaras, which were merged with Union of India and sovereign government was established, with great efforts. Now new rajwaras are being created in the name of SEZs.

SEZ developers and units established in SEZs have been granted various exemptions including exemptions from state and local taxes, tax on electricity, exemption from income tax for ten years, exemption from import duty, service tax, etc. They have also been ensured sufficient availability of water and electricity.

Government, farmers and labours at a loss
It may be noted that though Indian and foreigner SEZ developers may gain from various exemptions given by the government, the nation will incur heavy loss of revenue. Government has itself conceded that it will incur a total revenue loss of Rs 93,900 crore in the next four years and it will continue. The farmers, whose land is being acquired for SEZs will also lose their employment. Though land is being acquired in different quantum for different kind of SEZs, lakhs of hectare of land is being acquired overall. About 40,000 hectares of land has been acquired by Reliance alone in Haryana and Maharashtra (near Mumbai). Land acquisition spree is continuing unabated by different industrial houses, which are acquiring land at any cost. Government machinery is also helping them in this acquisition spree by either acquiring itself or facilitating them in land acquisition.

The Minister of Commerce claims that in the next five years there will be five lakh employment opportunities due to SEZs. But he conveniently ignores the loss of employment of farmers and landless labours working in the land being acquired for the purpose of SEZs. It is a fact that very limited employment opportunities will be created in SEZs because of heavy capital-intensive technology being used in SEZs, but definitely lakhs of people will lose their employment. It is very unfortunate that for implementing any policy in which the ?people in the government? are interested, misguiding employment-generation arguments are given, without even mentioning the loss of employment due to the same policy. This act of policy-makers is highly deplorable.

Lack of rehabilitation policy
While making such an ambitious plan on SEZs, policy-makers conveniently ignored the issue of displacement and loss of employment by lakhs of people due to this policy. Rehabilitation and employment provisions have to be a part of any such policy. Farmers? agitations in Nandigram and Singur in West Bengal, Dadri in Uttar Pradesh, and various other places in Andhra Pradesh and Maharashtra have brought this problem at the nation?s centre stage. Government has been fully exposed for the mischievous lack of rehabilitation provisions in the SEZ policy.

Regional imbalances
Townships being developed in the name of SEZs with different kind of relaxations and facilities will attract industries and businesses from different other parts of the country. This phenomenon will not only lead to heavy loss of revenue but will also cause great regional imbalances.

Endangered food security
The area chosen by the SEZ developers mostly consist of highly fertile soil, where two or more than two crops are grown. Due to the acquisition of land in such areas, food grain production is likely to get adversely affected. Lakhs of hectares of such land has either been acquired or has been notified. Arable land is being forcibly reduced in the process. The President of India has also shown his concern over the constantly declining arable land, which is likely to go down from 135 lakh hectares at present to 95 lakh hectares by 2010.

Environmental and other laws being bypassed by SEZs
These specially created foreign territories have not only been provided with various exemptions from taxes, they are also being encouraged to bypass the law of the land. Environmental laws have been relaxed in the SEZ Act. Though there is a provision to assess the impact of SEZs on environment, SEZs have been exempted from the provision of public hearing and the land-use declaration. In case of offence of non-compliance with environ-mental laws, units in SEZs cannot be directly booked and there is a condition to get prior permission from the SEZs authority. Labour laws of the country will also not be applicable on SEZs. It may be noted that labour laws have evolved with time with the objective of welfare and protection of labours. Inapplicability of labour laws would no doubt lead to exploitation of labour.

Luxury centres in SEZs
Though various exemptions have given for the developers and units in SEZs, only 25 per cent of land is required to be used as processing zone. The rest 75 per cent of the land can be used for residential, retailing, hospitals, hotels, education institutions, multiplexes, etc. For constructing all these, SEZ developers need not pay any tax on materials. Thus SEZ developers will be free to maximise their profits at a lower cost. Such centres outside SEZs will be deprived of this advantage. Thus there is a danger of concentration of luxury centres in SEZs. Therefore, it can be said that such luxury centres in SEZs are being created at the cost of farmers by grabbing their land and thereby snatching their employment, and food security, integrity and sovereignty of the nation and such centres will further widen the gap between the rich and the poor, haves and have-nots.

(The writer is Reader, PGDAV College, Delhi University and can be contacted at M-451, Guru Harkishan Nagar, New Delhi-110 087.)




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