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Niche economic enclaves

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Raghu Dayal

SPECIAL ECONOMIC ZONES — International Experience and Indian Scenario: V. K. Srinivasan, P. S. Sundaram; Media India News Service, Road No. 10/11, Banjara Hills, Hyderabad-500034. Rs. 350.

In their joint effort, V.K. Srinivasan, an economist with a comprehensive exposure to policy-making in Central and state governments, and P.S. Sundaram, a journalist — as a rule susceptible to popular perceptions necessitating clarity in communication — have presented a rich and cogent treatise on a subject that has, of late, elicited diverse and contentious views and arguments. The volume thoughtfully arranged in 14 chapters comprising four parts helps the reader grasp the whole gamut of international experience in special sanitised economic enclaves with varied nomenclature against the perspective of India’s own dithering developments in this genre, with all the scepticism and resistance that the Special Economic Zones (SEZ) scheme has so far evoked.

Evolution

The book in the initial chapters traces the staccato march of India’s economy, especially its external sector, sprinkling the account with references to numerous committees and analysts, for which India is known to have a special penchant. It alludes to recommendations and resolutions galore, articulating the need for change in the nature and quality of state intervention in the economy. There follows the evolution of schemes for export processing zones, export oriented units ever since “Asia’s first EPZ” at Kandla in 1965 culminating in the latest incarnation of special economic zones.

The reference to international experience in Part II clarifies the nuances of export processing zones, industrial free zones, free trade zones, special economic zones, free economic zones et al, of varying size and intent in different parts of the world, especially China’s celebrated special economic zones, and little known economic and technological development zones. These enclaves cater to a conducive environment and framework for “free” trade and investment, many succeeding in realising their mandate, while many more went floundering.

The Indian scenario in Part III clearly shows the road that the country traversed over some four decades, transforming the initial Export Processing Zone (EPZ) scheme of the days of stringent controls and regulations to the seemingly ambitious SEZ project announced with a fanfare as a part of the Exim Policy in April 2000. The main differences between the EPZ and SEZ schemes are well summarised — although there is little explanation given for the illogical conversion of the then existing EPZs into SEZs.

Fiscal implications

Chapter V aids the reader to understand the real essence of the much-liberalised SEZ scheme against the backdrop of the limitations of the old EPZs — and, of course, the controversies, suspicions as well as support the new legislation has engendered in the wake of an unbridled proliferation of the scheme. The differing stance in regard to the fiscal implications of SEZs between the Revenue and Commerce Departments is described in the next chapter. Perhaps the most critical aspect has been that of land acquisition, also not as fiercely controversial as the subject of employment and labour, which is discussed next.

The examination of the role of state governments and promotional agencies as much as the political dimensions of the SEZ scheme focus on the “unbalanced” dispersal of SEZs across different states. An interesting reference in the penultimate chapter to the assessment of the scheme by media is rather sparse and of little avail; today, media as a rule is perceived to be short of zeal to delve deep and dissect the issues for a profound analysis and objective assessment — of any major issue in the public domain.


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