Fifth Meeting

Assessment of the Potential Costs and Benefits of Special Economic Zones in India
New Delhi, India, May 03, 2007

CUTS International organised the fifth meeting of PARFORE at Council for Social Development (CSD), in New Delhi that discussed an important issue entitled ‘Assessment of the Potential Costs and Benefits of Special Economic Zones in India’. Dr P C Alexander chaired the discussion. Initiating the discussion, Pradeep S Mehta introduced the subject and referred to a study on that, recently undertaken by CUTS.

Most participants expressed their views on Special Economic Zones (SEZs) and cautioned that concerns of various stakeholders must be adequately addressed before any land acquisition takes place. Majority of Parliamentarians called for a revamp of SEZs policy to ensure inclusive growth and peace in the country.

Chairing the meet, Dr Alexander remarked that small and medium-sized enterprises (SMEs) should be given enough space in these SEZs as they are generating more employment and tax revenue. He argued that the social impacts of land acquisition should be adequately addressed.

While criticising the large size SEZ with 50 percent (earlier 65 percent) of non-processing area and perpetual ownership of such lands in the hands of developers, Santosh Bagrodia said that it would lead to rebirth of ‘Zamindari’ system in the country. He was opposed to granting large-scale tax benefits to the industrial units established in SEZs as it could lead to tax revenue loss without giving rise to adequate employment and export generation.

Commenting on the issue, Dinesh Trivedi emphasised that prosperity can take place only when there is peace. There should not be any land grabbing and forceful evacuation of farmers from their lands, not even by the State Government. While supporting the SEZ policy Trivedi advocated for farmers to be made partners in progress.

Rahul Bajaj, Member, Rajya Sabha advocated for a balanced regional development through dispersal of industries across the length and breadth of the country. He said that SMEs be given adequate attention. To avoid the risk of conversion of SEZs into real estate business Bajaj strongly argued for having at least 75 percent, if not 90 percent of the total area of SEZs as processing one.

Sharad Joshi pointed out that though farmers love their land they are ready to sell it in today’s changed scenario for their own betterment. Moreover, to protect the interest of the farmers land should be acquired through competitive bidding, Joshi added.

M V Rajasekharan said that food security be given the top most priority as even a miniscule drop in the food production could affect the people. He felt that the SEZ Act in its present form cannot be accepted and should be redrafted to prevent agriculture land being acquired for SEZs. He also referred to Mahatma Gandhi’ approach of ‘there go my people and I follow them’, thus putting the people in the centre of everything that the Government does.

Gireesh Kumar Sanghi, Member, Rajya Sabha, while stressing the need for SEZs in the progress of the country, pointed out that due to SEZs farmers are receiving the right price for their land. He was of the opinion that land should be acquired with consensus, not force.