India's special economic zones
under fire By Praful Bidwai
NEW DELHI - Faced with energetic and
widespread popular protests against special
economic zones (SEZs), India has decided to go
slow on this particular model of industrialization
based on creating export-oriented tax-free
India's federal government
recently announced a suspension of all land
acquisition for establishing new SEZs until a new
policy on the rehabilitation of displaced people
is announced. This followed an intervention by
Sonia Gandhi, president of the Congress party,
which leads the ruling United Progressive Alliance
Gandhi expressed her concern at the
large-scale uprooting of
people from agricultural
lands and the loss of livelihoods. Popular
discontent caused by displacement, many Congress
leaders fear, will adversely affect the party's
chances in upcoming elections in a number of
states including Punjab, Uttar Pradesh and
No less important than this
temporary (and probably tactical) move is the
announcement by the Marxist chief minister of West
Bengal, Buddhadeb Bhattacharya, that no SEZs will
be set up in the state unless his allies in all
the four parties that comprise the ruling Left
Front grant their full consent.
Bhattacharya, who represents the Communist
Party of India (Marxist), said: "I will do nothing
in violation of what our four left parties decide
on SEZs. If necessary, I will step back."
Party general secretary Prakash Karat has
since asserted that the SEZ process would be kept
in abeyance until the CPM politburo discusses the
matter next week and sorts out differences with
the other Left Front constituents. The leaders of
these, the Communist Party of India, the
Revolutionary Socialist Party and the Forward
Bloc, oppose the very concept of SEZs as vehicles
Until this week,
Bhattacharya was a staunch supporter of SEZs. His
government had earmarked as much as 56,660
hectares of land for acquisition from farmers on
which to create these zones.
Bhattacharya's announcement is widely seen
as an acknowledgement of the growing unpopularity
of SEZs. West Bengal witnessed pitched battles
over the past two months at Nandigram and Singur,
40-60 kilometers from Kolkata.
is the site of a proposed 4,050-hectare SEZ to be
developed by Indonesia's Selim Group. Singur is
where the Tata business group is planning to build
a car factory on 403.5 hectares of land.
On January 6 and 7, six people died in
violence at Nandigram. Villagers in the area have
erected roadblocks to prevent officials from
entering and conducting operations leading to land
So fierce was the protest
that the Left Front government declared in the
second week of January that there would be no land
acquisition at Nandigram until the project is
properly evaluated. Acquisition and fencing of
land, however, are continuing in Singur.
"The fact that Bhattacharya has offered to
step back signifies a major change in the West
Bengal CPM's thinking on the issue," said Tanika
Sarkar, a professor of modern Indian history at
Jawaharlal Nehru University, who recently visited
West Bengal as part of a citizens' fact-finding
team to inquire into displacement and violence.
"The CPM's retreat represents a major victory for
the people. Hopefully, this will lead to
rethinking in the state party on the idea of
industrialization at any cost."
Bengal is not the only, or the leading, state
where SEZs are being built. The Indian government
has approved 237 SEZs with 34,509 hectares of
land. While 63 are already under construction,
another 165 SEZs have been approved "in
principle", for which nearly 15,000 hectares are
to be acquired.
Applications for 300 more
SEZs are pending. Most of the big ones among these
are in Maharashtra, Uttar Pradesh, Haryana,
Gujarat and Punjab.
West Bengal is the ferocity of protests against
forcible land acquisition and the fact that the
CPM's own grassroots leaders are deeply divided,"
argued Ranabir Samaddar, a social scientist
attached to the Calcutta Research Group. "The very
cadres whom the CPM had educated on land rights
and trained in agitational methods are now leading
the protests against it."
The Left Front
has been continuously in power in West Bengal for
three decades, considered a world record. A key to
its success is the "Operation Barga" land reform,
under which sharecroppers won the right to
three-fourths of the produce of the land that they
worked, while the absentee rentier-owner received
SEZs have provoked protests for
three reasons. First, they involve forcible
procurement of land under the colonial Land
Acquisition Act of 1894 and discrimination against
underprivileged small landholders. Second, they
are seen as a form of "crony capitalism", doling
out favors to business through undeserved tax
breaks and other concessions at the expense of the
And third, SEZs are likely to
create few benefits, including jobs, in relation
to the number of people they displace.
1894 act allows the government to acquire land for
a "public purpose". It was originally devised to
create a system of irrigation canals and roads.
But in recent decades it has been used to buy land
from reluctant peasant farmers for private profit.
The farmer has no choice but to sell. The
price paid is often well below the market rate.
Those who lack clear title to land - thanks to
India's Byzantine laws and archaic registration
procedures - get just a pittance. Some 70% of
India's 1.1 billion people depend on agriculture.
"Even more important than this unequal
price bargain is the complete loss of livelihood
that separation from land entails," said Amit
Bhaduri, an eminent economist currently with the
Center for Social Development in Delhi. "A large
majority of those who are displaced due to land
acquisition are unable to find an equivalent
livelihood or other means of survival. Communities
get split, families are divided, and large numbers
are reduced to penury."
It is estimated
that various "development" projects have displaced
some 38 million people in India since independence
- about double the entire population of such
countries as the Netherlands or Australia. Studies
show that not even half the number of those
displaced get properly resettled or rehabilitated.
Some have been displaced more than once.
In recent years, people's movements have
drawn up charters for proper rehabilitation prior
to displacement. They insist that the government
obtain informed consent of the affected people
after fully sharing with them all relevant
information about the project.
government led by Prime Minister Manmohan Singh,
which came to power in 2004 riding a wave of
public anger against a pro-rich, right-wing
dispensation, had promised a humane rehabilitation
policy and is under growing pressure to formulate
"It won't be easy to reconcile the
interests of corporations and the people," said
Bhaduri. "But the government must act as a
regulator and defender of the people's rights and
Supporters of SEZs claim they
will accelerate industrialization and generate
employment. Another argument is that agriculture
can no longer absorb the large numbers entering
the workforce, so any kind of industrialization is
better than none.
This is contested by
economists who point out that there are
labor-intensive alternatives such as
agriculture-based processing and "town and village
enterprises", which were a great success in China
long before that country embarked on export-driven
Bhaduri estimates that SEZs will
create only one job in place of the four
livelihoods they destroy. "This is a grossly
unequal bargain. The government must radically
rethink its policy if it has any respect for