Special Economic Zones, or SEZs, are an outcome of the planned policy to make Third World countries forever dependent, through the construction of an export-led economy prescribed for the Third World in the name of development.

In the late 70s and early 80s, China veered to becoming a market-led economy. A decade later, the upstick in the development of China, especially its steadily rising GDP, drew world attention. It was widely believed that China achieved this because of its SEZ programmes. The NDA government’s Commerce Minister Murasoli Maran was impressed by the SEZs of China when he visited that country in 2000. He propagated the concept of SEZs in India. In 2002, the SEZ policy was adopted in India. In 2003, West Bengal became the first state to establish an SEZ, in Manikanchan. In 2005, the central government enacted the SEZ Act and framed the rules in 2006.

Development means meeting the basic needs of the people. An export-oriented economy will prove to be a curse to them. The capitalist world wants the Third World to send their resources to the developed world. It says it will cut down imports as well as reduce foreign loans. In this way, the capitalist world wants to tie up the entire world for its own benefit. This is simply a system of exploitation. To improve the quality of life in the Third World, however, the dependence theory must be done away with. Instead, human development should be aimed at. The skills of the people should be developed in such a way that they are institutionalised. This must be accompanied by the production of commodities to meet people`s needs and the development of the service sector for public purpose. The Third World will then have an economy that is far less dependant on imports, with the need for foreign loans reduced to the minimum.

Land Acquisition

Land is mainly being acquired by the state governments, utilising the age-old, colonial Land Acquisition Act 1894. This anti-people Act has not been amended or changed to suit the interests of the common people of an independent nation. No regulatory mechanism has been put in place to monitor and or compensate the poor and marginal peasants, in particular, and the people, in general, who will be subjected to tremendous losses and deprivation, following such a land acquisition process. Needless to mention that more than 33 million poor people have already been most adversely affected, following the ‘developmental’ programmes being pursued by the Government of India since independence. Scores of people have been evicted from their traditional homes, villages and occupations, more than once in last 60 years. Millions of people have been forced into becoming ‘migratory’ population. They are being subjected to severe humiliation and utter deprivation from the minimum essentials of living. Fresh derogatory programmes are being unleashed by several state governments to accommodate and advance the ugly interests of capital without any comprehensive rehabilitation and resettlement Act in the country. This vital question has been left to the whims of the different state governments.

SEZs are meant to be utilised for promoting Export Oriented Units (EOUs) of industrial activities, real estate, amusement parks and other such activities. This includes the shifting of IT industries from present conventional sites, so that they can enjoy the completely relaxed taxation regime and other facilities. State governments are being encouraged to compete amongst themselves to offer several undue advantages to the investors, caring little for the people who lose their land and the environmental or ecological concerns. Even if we ignore the interests of millions of dispossessed people, including millions of agricultural workers, the already scarce water resources of many more additional hectares of land will also be depleted, following the indiscriminate construction of hundreds of SEZs in several states of country. This alone will, no doubt, lead to an environmental catastrophe. That the governments, both at the centre and in the states, are indifferent about protecting the interests of the poor and marginalised population is ironic. Governments are failing to perform their minimum moral or legal obligations, as required in any civilised country.

The government statement that ‘wastelands and single crop lands’ will be acquired for SEZs is also ad-hoc and altogether irrelevant. Anyone having a minimum understanding of rural India would know that land use in India is never confined to cultivation alone but also extends to collective use for day-to day survival. Fuel, fodder, other non-timber forest produce requirements are met from land, which could be categorised as ‘common property resources’, but are also referred to as wasteland by the government. Many ‘wastelands’ are being developed by poor farmers for cultivation whereas the government records have not been updated to reflect the exact or ground reality.

To avoid any farmer-developer conflict, the Uttar Pradesh (UP) government has put on hold all SEZ projects. Even Orissa has scrapped an SEZ by the Jindal group though it appears to be going in for an ambitious SEZ venture by the South Korean steel major Posco group. Bihar has not even bothered to join the SEZ race. It remains the sole state that has not forwarded any SEZ proposal so far. State Chief Minister Nitish Kumar has repeatedly expressed his opposition to taking away the land of farmers for industrial purposes. Andhra Pradesh government, on the other hand, has firmly refused to backtrack on the SEZs already approved, even if these are on farmers’ lands. Even the Congress Party President and United Progressive Alliance (UPA) Chairperson Sonia Gandhi told a conclave of her party chief ministers that farmers’ lands should not be taken over for SEZs. Bowing to such pressure, the Commerce Ministry has issued a direction to states that agricultural land should not form more than 10 per cent of an SEZ.

Undermining Law to Protect the Interests of Capital

In an extremely zealous rush to facilitate the setting up of the mega SEZ projects, the central government is diluting even the National Rehabilitation Policy based on a 2006 draft as circulated by the Ministry of Rural Development.

Obvious is the fact that trade and export zones do not care to respect labour laws. The instances of severe labour exploitation for amassing huge surplus are rampant in the areas of industrial and other activities all over the world. India is no exception.

Prior to the SEZ Act 2005 and the introduction of the SEZ policy, theoretically, all labour and factory legislations were fully applicable in the Export Promotion Zones (EPZs). However, even in the EPZs, trade unions were practically absent and rare despite several attempts of the different trade unions to organise the employees. The key reason for this is the restriction of entry into the EPZs only to the employees, who are transported directly to and from the factory gates.

In the current SEZ regime, labour laws have been significantly watered down. Chapter 2 Clause 5(g) of SEZ Rules hands over the power to the Development Commissioner (DC) to declare an SEZ a ‘Public Utility Service’. Clause 5(f) delegates powers to the DC to handle workman-employee relations the way he desires. The functions of the Labour Commissioner are also being, unfortunately, handed over to the DC. This will, no doubt, put labour in a precarious condition as against the rampant atrocities of the capital. Women workers especially will be subjected to severe hardship in the workshops and sexual harassment.

The SEZ Acts and Rules have so many ambiguities, including the lack of mention about the role of the Pollution Control Boards. There is no obligation on the part of the investor or the DC to abide by the Municipal and or Panchayat Acts, including the 73rd and 74th amendments. SEZs will constitute an altogether separate state within the state, possibly leading to a situation when outsiders, including the people`s representatives, will have to seek permission to enter the demarcated areas.

Tax Holidays and Welfare Policies

SEZs will be exempt from all taxation, including excise duty, customs duty, VAT, income tax etc., and thereby the state exchequers will suffer most serious debility and a resultant shortage of funds.

This will lead naturally to a further dismantling of welfare measures meant to protect the lives of millions of downtrodden of the country. The finance ministry estimates that there will be a net loss of not less than one lakh crore rupees on an assumed investment of nearly Rs 3,60,000 crores. There are a number of examples in this country of investors choosing to shift activities after the expiry of specified tax holidays, resulting in severe joblessness. What is more agonising is that the conversion of land back to agricultural activities is almost impossible. Hence, such a path of industrial development is uncalled for and anti-nation.

Whether the SEZs, cleared by the government, will really meet the commerce ministry projections on employment and exports is too early to say. However, serious questions have been raised over whether these will really help prop up the country’s crumbling infrastructure. More than half the approvals given have gone to information technology (IT) firms, which need little infrastructure except a good telecom network that India already has. Nor do these SEZs make any contribution to the development of infrastructure.

Ideology and SEZs

The 19th Congress of the CPI(M) decided to adopt different guidelines for industrialisation in Kerala, West Bengal and Tripura, the states ruled by the Left Front. Explaining the decision, Buddhadeb Bhattacharjee said whereas huge industries were suitable for his state, Kerala should concentrate on traditional and small industries and development based on social services.

Kerala`s finance minister, TH Thomas, vociferously attacked the theory saying there could not be different industrial policies for different states. He argued that a state like Kerala could not grow, depending only on the traditional sector. It too needed external loans, he said.

But the clincher came when Buddhadeb was asked about the possibility of honouring the country’s labour laws inside an SEZ. “Nobody can by-pass the laws of the land. Labour interests have to be protected.” One of his senior colleagues said, “Buddha is joking knowing well that he is joking, the party is joking. Will any western company allow any kind of Marxist labour rights inside its SEZs? That is the very opposite of the concept of an SEZ, which is an independent republic.”

The Experience of China

The NDA, UPA and even the CPI(M) aim at following the Chinese experiment with SEZs. However, China had to change course, facing resistance, particularly on land acquisition. It has sought to placate the population with offers of pension, subsidy and other forms of social security. Even these were considered inadequate. The extremely harmful experience of China is to be studied carefully. It adopted an economic policy that gave rise to socio-economic stresses and strains. It may be able to cope with that situation with its monopolistic political power structure. India`s socio-economic development is also undergoing changes that are not to the satisfaction of the masses of the country. The SEZ is one example that shows that the blind application of a foreign experience will harm rather than help the Indian people.