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Rediff.com  » Business » Why SEZs are getting controversial

Why SEZs are getting controversial

By Sunil Sethi
August 26, 2006 14:54 IST
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Given the amount of heat generated in the just-concluded session of Parliament, and the growing numbers outside joining the issue, the subject of special economic zones promises to be one of those thrilling episodes in the great Indian debate of how to speed up industrial growth-manufacture, employment, exports and all the rest of it, including, for all we know, wall-to-wall shopping malls and multiplexes.

First, there is the less-than-edifying spectacle of two Cabinet ministers - P Chidambaram and Kamal Nath - furiously at loggerheads.

The commerce minister has won the round by having the cap on SEZs lifted from 150; there could now be 300 or even 400 across the country, to the deep annoyance of the finance minister, who fears a massive loss of revenue due to tax holidays and other forms of baksheesh (sops) promised to promoters.

Second, as the line of industrialists in search of acquiring vast tracts of land grows, so do the dissenters who call them 'Special Expenses Zones'- an easy opportunity, it's alleged, for favoured robber barons to profiteer through property development.

Former Haryana Chief Minister Bhajan Lal's son Kuldeep Bishnoi, Congress MP from Bhiwani, has called the SEZs nothing but "sophisticated land grab" and the creation of "private fiefdoms that hark back to the zamindari system", in the Lok Sabha.

For politicians like Bishnoi, the SEZs are a heaven-sent protest platform, ever since his political foe Congress Chief Minister Bhupinder Singh Hooda's government signed an MoU with Reliance Industries Ltd for a 25,000-acre SEZ to come up in District Gurgaon, right in Delhi's backyard.

A perfect opportunity to stir up a farmers' agitation-with an ironic flourish Bishnoi calls it the "Aam Aadmi Adhikar Andolan", as much of it is shown to be agricultural land in Haryana maps-and galvanise the capital's gentry, who either have recreational or retirement homes there and, worse, a call to arms to environmentalists because the SEZ abuts the Sultanpur bird sanctuary, which is a notified national park and home to thousands of migratory birds.

On top of that, senior retired bureaucrats have raised the question as to whether it's in the Haryana government's gift to proffer 25,000 acres from what is designated as the National Capital Region through an Act of Parliament.   A flurry of PIL cases and right to information applications are in the offing.

The Gurgaon SEZ is likely to become a high-profile test case of the two sides ranged against each other: the conflicting interests of the government-industrial lobby versus the rest.

Much of the controversy arises from the ambiguity and secrecy that shroud land acquisition for SEZs. Who are they for and are they above the laws of the land? What kinds of industrial and commercial activity will be allowed or barred?

If large parts of SEZs are to end up as high rises, shopping malls and Armani showrooms, then the conscientious objectors have a point.

There are innumerable examples of how land sold cheaply in the past has only helped feather the nests of politicians and business interests rather than create public amenities or help the urban or rural poor.

Other than P Chidambaram's objections to loss in tax revenue, will SEZs be self-governing enterprises, exempt from laws that restrict conversion of agricultural land use, of land that belongs to the NCR or land perilously close to national parks or monuments?

Secrecy is another problem. Politicians often act surreptitiously in concert with big business. By the time the Mayawati government's lingering gaze at the Taj Mahal was rudely cut short by the courts, matters had gone quite far-shopping malls and cineplexes were being planned on the embankments of the Jumna.

In the case of the Gurgaon SEZ, plenty of speculative maps are in circulation, but neither the Haryana government nor RIL has come forward with a clear or truthful picture.

No wonder there were ruffled feathers at a meeting of the Bird Society of Delhi's last meeting over the future of the Sultanpur sanctuary. Who said an SEZ is for the birds?

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Sunil Sethi
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