Do we need SEZ's ?

There is a lot of debate going on in
India about SEZ(Special Economic Zone)
SEZ's are being projected as an elixir,
which will give a huge impetus to the
Indian economy.
Big industrialists are pumping in huge
amounts of money in lobbying to create a
favourable atmosphere for SEZ's.

What is an SEZ -> As the name suggests, it
is a piece of land, running into thousands
of acres. This area would have special
labour laws. The industries operating
inside these SEZ's would get huge tax
benefits. There would be housing complexes,
malls, restaurants, movie theatres, etc in
SEZ's. One salient feature of SEZ's is
that govt would be acquiring land, mostly
from farmers for SEZ's at supposedly
throw-away prices and simply evict the
farmers. More on this later.
In short SEZ's would be like leeches on the
economy. They would enjoy benefits from
India, without much obligation to pay
back. SEZ's are promising huge employment
opportunities, for getting these benefits.

Do we need SEZ's ?
To take care of industrial development,
each state in India has got a state
Industrial Development corporation, which
creates industrial areas, and take cares of
the infrastructure needs of industries.
Also to take care of export oriented
industries, most of the states have EPZ aka
Export processing zones. Industries under
these zones, are given import duty benefits
under the condition, that all their
products would be exported.

SEZ's are supposed to enjoy the benefits of
EPZ's but not the responsibility, i.e. the
export obligation won't be there. This
would give the industries in SEZ's an
unfair advantage over companies, which are
operating outside SEZ's. This question is
still largely vaguely answered.

Opposition to SEZ's
Opposition to SEZ's is from several quarters
- farmers
Farmers are asking, why should they be
displaced ? A fair question. If someone
comes at your doorstep and tells you to
leave your house, and get relocated what
would be your re-action ? The situation
gets more complex, when you consider that
the livelihood of these farmers is their
very own land. Their skills are in
farming, and they have a lot of attachment
to their land. Govt and the SEZ lobby
wants the farmer to learn new skills, and
be part of the industries under SEZ. This
is like telling a software professional
to start working on a farmland. So
outlandish, and absurd ofcourse.

- Economists
Some economist, are questioning, whether
SEZ's will really help India. A report of
a recent SEZ has shown that the company
proposing that SEZ had earmarked 45% of
the land for housing and related things
like malls, etc. And 55% for industrial
activity. So the real motive is to create
hosuing enclaves under the facade of
industrial development ?

- Credibility
There is a huge question on the
credibility of private players. In the
past private sector has been largely
socially irresponsible. So it remains
to be see, if the private sector, can
really achieve the stated goals of SEZ's,
rather then becoming real estate
companies.

- Area of Land
The size of land that these SEZ's are
demanding are raising serious doubts,
about their real motives. Thousands of
acres of land is being ear marked, without
a real need for it. In fact the actual
need is only a fraction of the land
that is being demanded.


There have been violent opposition to SEZ's
from farmers, and they have a very good
reason for it. The govt is behaving like a
dictator, and caring less for the
farmers. The recent spate of demonstrations
by farmers in the state of West Bengal and
Maharashtra, have put the state governments
temporarily on a backfoot, and they have
softened a bit. Lets see what happens next.