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Special Exploitation Zones

By Tejal Kanitkar & Puru Kulkarni

18 October, 2006

Special Economic Zones (SEZ) is a pseudonym for a new tsunami let loose on the Indian working class and peasantry by the Indian State. The bill was passed with much rapidity and urgency in both the lower and upper houses and is now called the SEZ Act. With the recent trend in government policies, this act is not a very big surprise, but by far it is the most blatant and extreme form of exploitation inflicted on the Indian poor by its own government. Vandana Shiva, an environmental activist has very rightly called it the “biggest land grab in the history of independent India”.

State and Central governments will together acquire land from people who have been living on it for generations. Of Course they will compensate those who “own” this land. No compensation will be given to those who don’t own it but depend on it directly or indirectly---farm workers. The compensation given/to be given to land owners will be lower than what they would otherwise get for the land. Only agricultural land or non-village land will be acquired---nullifying the need to address the rehabilitation and resettlement of the project affected. The government will resell this land to big industrialists/SEZ developers for prices a lot higher than paid to the farmers, but lower than what otherwise would be the market prices---a win-win for everyone but the farmer. But why and how will these people just give away their land for nothing?

The Indian State still harps on trickle down, which is now widely discredited world over. SEZs will provide numerous jobs, infrastructure and most importantly “development” for the village and consequently the villagers---were the farmers asked if they want this development which snatches away their way of life? These jobs that SEZ developers are promising will be generated in the various projects within the Zones. What will these projects be? The Act mandates 25% of the land to be used for economic activity or cash flow generating activity. The rest can just be real estate. When the Government takes 1000 acres of good fertile agricultural land from farmers and gives it to Reliance, Reliance can build houses or golf courses on 750 acres of it and it would be legal, as long as the rest of the 250 acres is used to generate economic activity, which could very well be IT centers and shopping malls. Note that the 25% land has been mandated for economic activity and not industrial activity, generating jobs for the-now landless farmers in whatever the SEZ developers decide to build. It is not hard to imagine the jobs farmers, landless labourers and their spouses and children would get in IT centers, shopping malls, golf courses or residential complexes.

The SEZs are “Special” for many more reasons though. Land grabbing is just one little part of a bigger scam. These Zones would be alien lands within the Indian nation---twenty one different Indian laws are inapplicable within the Zone, one of the most important being the Panchayat law. The very core of democracy---the right to self-determination, the sovereignty of the people living in these Zones will be taken away overnight. Almost all governance of the Zones is the responsibility of the Development Commissioner. Far from being elected by the people living in the Zones, this person will be appointed directly by the Central Government. Further, everyone will need an identity card or a passport to be able to commute within and stay in the Zone. The farmers/farm workers who once tilled that very land will now have to show ID cards to walk on it. To top it all, SEZs have been declared as a Public Utility Service---shopping malls, recreatation centers, golf courses included! This provision will easily be exploited to hire and fire workers, crack down on organizing and restrict all kind of union activity. There will be no respite from unfair, exploitative business practices that many of the prospective SEZ developers are known to practice even outside these Zones.

The specialty of the special Zones doesn’t end here. Everything within the Zone would have a ten year long tax holiday. There will be no taxes, duties, cesses on anything within this Zone. No income tax, no import duty, export duty, no cesses on electricity and water. The resources within the Zone can be freely exploited by the SEZ developer. Water that belonged to the communities living there for generations together will now belong to Reliance, Tata, Bharat Forge, Ispat, Aditya Birla Group and many such others. Once a state government clears an SEZ it will be obligated to provide the required resources for the SEZ - most importantly electricity.

There has been no effort to check the SEZ experience in other countries. The experience in China has been that of companies wrapping up their industries once the tax holidays terminate. What happens then? The Indian State waives off all revenue generating taxes to encourage investment and when the time comes for the multinationals to pay back, they can just wrap up and leave?

One hundred-fifty Special Exploitation Zones have already been sanctioned. This means 70,000 hectares of land is being grabbed as we read this.Two hundred twenty five more Special Exploitation Zones are waiting approval. This means that 2,74,000 hectares of land will be grabbed soon. The extent of the planned mass murder and mass displacement is unimaginable.

Tejal Kanitkar
Industrial Assessment Center
Department of Mechanical Engineering
University of Massachusetts, Amherst
(413)-545-4216 (Lab)
(413)-687-2090 (Res)

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