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Updated: June 18, 2014 20:15 IST

What makes SEZs controversial

S. Gopikrishna Warrier
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Power Policy and Protest. The Politics of India's Specilal Economic Zones. Author: Rob Jenkins, Loarine Kennedy and Partha Mukhopadhyay
Power Policy and Protest. The Politics of India's Specilal Economic Zones. Author: Rob Jenkins, Loarine Kennedy and Partha Mukhopadhyay

It is a good idea to publish books around the time of national elections. They catch readers’ attention. Especially so during the recent fiercely fought national elections when many topical titles appeared on the bookshelves in the past months.

Perhaps, it was a coincidence that the book under review — Power policy and protest: The politics of India’s special economic zones — was published close to the national elections. But considering that the volume deals in depth with the implications of the Special Economic Zones Act, 2005 (SEZA), it is a timely review of one of the most significant economic policies of the Congress-led United Progressive Alliance (UPA) government. It is an appropriate time to have the book on the shelves when the UPA’s economic policies are undergoing post-mortem analyses.

The chapters straddle two key politico-economic legislations of the UPA government — the SEZA and the Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARRA). Though the book was finalised before the LARR Bill was passed by Parliament, it covers the discussions that went into its preparation.

The book looks at the implementation of the SEZA and the establishment of special economic zones (SEZs) in 11 states — Andhra Pradesh, Goa, Gujarat, Haryana, Karnataka, Maharashtra, Odisha, Punjab, Tamil Nadu, Uttar Pradesh and West Bengal. Thus it covers most of the discussions, disputes and controversies related to SEZs that had done their rounds in the past decade. Each of the chapters deals with a state in detail and is authored by an academic or journalist.

The process of piloting the SEZ Act through Parliament and establishing the zones signalled a new approach at advancing economic reforms. Since the Act came almost in the first year of the UPA Government, it signified the Congress-led coalition’s efforts to restart the process of economic reforms that it had initiated in 1991, and had to leave off after it lost the national elections in 1996. Even though the United Front and the BJP-led National Democratic Alliance governments continued with the economic liberalisation process in the period between 1996 and 2004, the UPA felt that it needed to re-validate its authorship on reforms through the SEZA.

“By establishing a legal framework for the creation of a geographic area governed by a distinct regulatory regime — where taxes and bureaucratic burdens on business activity, especially the development of export infrastructure, are substantially reduced — the SEZA signalled a new approach to advancing economic reforms,” note the book’s editors in their introductory chapter. However, to balance the push towards industrialisation that the SEZA provided with social concerns, in the same year the UPA piloted two other legislations — the Right to Information Act (2005) and the National Rural Employment Guarantee Act (2005).

The UPA demonstrated this yin and yang principle to policy making. This was mostly due to opposing pulls and pressures within the Congress party. According to the editors of the volume, the LARRA came about a result of the discussions and controversies that the implementation of SEZA generated.

The SEZA was worked upon with alacrity by private sector developers working in collaboration with state government agencies. Hundreds of SEZs were approved in the early years. By August 2011, 133 SEZs out of the 585 formally approved under the SEZA, were already operational.

The stated purpose of SEZA was to “provide for the establishment, development and management of the Special Economic Zones for the promotion of exports and for matters connected therewith or incidental thereto.” If this objective was adhered to in the spirit in which it was meant then the establishment of SEZs may not have had such severe objections as they faced.

However, parcelling of land for the private sector became the major reason for SEZA use and this led to controversy. To compound this was the fact that the normal democratic institutions, such as the panchayats and municipalities, did not have much control within the SEZs.

Rob Jenkins states that the most frequently and intensely debated issue within the Empowered Group of Ministers (EGoM) on the SEZs related to land. This was “prompted in part by concerns that land was being acquired for industrial purposes but then diverted for other uses, such as retail establishments and recreational amenities for high-end residential accommodation.”

Jenkins quotes the instance of the EGoM decision of June 2006, where it stated that the processing area should normally be at least 35% of the SEZ’s total size, an increase over the 25% level stipulated in the original 2006 SEZ Rules.

It is this perceived character of the SEZA of robbing the poor to support the rich that led to many disputes. Though there have been different instances of resistance against forcible land acquisition for development projects in the past, SEZA created a visible national target for coordinating these protests.

There were local agitations; confrontation between local communities, police and the administration; political protests; and questions in Parliament. The most visible, however, were the protests against the chemical-sector SEZ in Nandigram, West Bengal, and the disputes related to the steel-sector SEZ associated with POSCO India Pvt. Ltd.

In some of the locations the local protestors could partner with the National Alliance of People’s Movements (NAPM), a coalition of environmental and social organisations, and give a national dimension to their protests. Thus, the local communities could politically frame their resistance within a national perspective.

However, different state governments implemented the provisions of the SEZA differently. The local conditions at the sites where the SEZs were located were also different and so also was the acceptance of the project or resistance to it by the local communities.

Power, Policy and Protest does a commendable job of looking at the SEZ-related situation in each of the 11 states separately and building them into a national picture. The volume would certainly find its place in the libraries of institutions dealing in development studies.

Two factors, however, could prevent a more popular dissemination of this book. The first is the purely academic manner in which it is written and presented. Academics, in their wisdom, usually miss out reader-friendliness in their writings. The second is the price of the book, which is more than what a common reader is likely to spend on impulse.

POWER, POLICY AND PROTEST — The Politics of India’s Special Economic Zones: Edited by Rob Jenkins, Loraine Kennedy, Partha Mukhopadhyay; Oxford University Press, YMCA Library Building, 1 Jai Singh Road, New Delhi-110001. Rs. 1145.

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