SEZs: Invitation to chaos?

What are Special Economic Zones (SEZs), the government's latest 'development' catchword, actually going to do for the people? How much of the proposed 'boost' is for real, and at what price could it be coming?

A Marathi booklet published by the National Centre for Advocacy Studies, a Pune-based research institute, takes an indepth and critical look at the Maharashtra scenario on SEZs. Apart from documenting well known facts like the huge concessions in taxes and virtual freedom from labour laws, the booklet also reveals lesser known facts like the land-use patterns within the SEZs and their implications, the involvement of criminal elements in land acquisition, the stake of real estate developers in SEZs and so on.

Notably, the booklet has been published in Marathi under the name 'Dhandgyanna Bhoodan' (Land doles to the filthy rich), which makes it accessible to the local populace, who mostly get left out when it comes to access to information. The booklet is supplemented by a short documentary film (also in Marathi) called 'SEZ – Arajakachi Nandi' (SEZ – Invitation to chaos). Sampat Kale and Sanjay Sangvai are the editors of the booklet, and Atul Pethe is the director of the documentary film. Kale, Sanghvi and Pethe are based in Pune.

The booklet contains a total of eight articles, most of them by social activists, which look at the different aspects of the SEZ issue and its implications on people.

The key question identified is that of land acquisition for the SEZs – the manner in which land is being acquired and the prices that are being paid for this land -- mostly fertile agricultural land.

In Maharashtra state alone, a total of 41 SEZs are at present proposed, and the amount of land to be acquired ranges between 2,500 and 10,000 hectares of land per SEZ. How is such a huge amount of land to be procured? For what purpose is this land going to be used? Why the insistence on fertile agricultural land? What sort of compensation will the farmers receive? And more important, what is to become of the thousands of fisherfolk and farm labourers who are also dependent on this land though they have no ownership rights?

In his article 'Dhanwantanchya Jameen Balkav' (Land grabbing by the rich), Sanjay Sangvai records the dubious 'land politics' going on in the Pen, Uran and Panvel tehsils in the Raigad district, where Reliance is acquiring 10,000 hectares of land in 45 villages. Initially, Reliance was supposed to buy the land at the price of Rs.4 lakh per acre. But soon tactics changed. It was announced that farmers were refusing to part with their land, and now the land is being acquired 'officially' through government machinery – the Maharashtra Industrial Development Corporation (MIDC) to be precise. Here, and in many other places, the state machinery is playing the role of real estate agents for the big business houses. (For the land being acquired by the MIDC, the compensation will be paid by Reliance.)

It is not just the land, but even the democratic rights of residents are going to be compromised. In 'Special Lootmar Zone' (special robbery zone), activist Ulka Mahajan points out that in the three above-mentioned tehsils, nearly 50,000 farmers will become totally landless. But since the residential lands of the villagers cannot be acquired, the villages will not be moved. Residential land is the land on which the villages are actually located. The villages itself will not be removed with the effect that they will continue to exist inside the SEZ. Only agricultural land is being procured for SEZs.

While this has been played up by Reliance as proof of its magnanimity, activists allege that this is a ploy to disqualify the villagers for rehabilitation. The fact is that on the one hand this situation will disqualify the villagers a right to rehabilitation, on the other hand the gram panchayats of these villages will loose their rights completely and the villagers will have to live within the SEZ with identity cards. The people are questioning this.

And finally, what is this huge chunk of land going to be used for? Export boost? Nonsense, claims Dr B R Sabde in his article 'Builderanche Ukal Pandhre' (Bonanza for builders). While a minimum of 2,500 acres of land are required for developing an SEZ, very little of this land will actually be used for industry. If the SEZ is based on a single industry, as little as 25 acres are sufficient. In case of the IT industry, even 10 acres suffice. Even in SEZs with multiple products, a maximum of 35 per cent of the land will be used for production purposes.

So, why is the rest of the land being acquired? For banking, insurance and hospitality industries, residential complexes, entertainment and shopping complexes and so on. It is quite clear that when industries come up, these services will be required and will have to be provided. And a large chunk of land is going to go for this. In the Mumbai SEZ, the concept of 'Walk to Work' is going to exist, as Dileep Chavre of Navi Mumbai Special Economic Zone Development Pvt. Ltd. has been quoted as saying in one article. And once residences of the expensive sort come in, all sorts of services are also going to be provided as a matter of course. It is quite an obvious thing that official policy papers 'omit' to mention.

The actual intention behind the SEZ idea, says Gajanan Khatu, senior labour leader and president, Lok Rajniti Manch (as quoted in the article) is "to grab as much land as possible as cheaply as possible. It will be more fitting to call these zones 'Special Real Estate Zones', as the real beneficiaries are builders."

And the profit margins are huge. As the article says further, land that is purchased at per hectare prices will then be sold at per square foot. It is hardly surprising that the biggest builders in the country – Dalmia, Mahindra, Ansal, Banyan and others apart from Reliance – are queuing up before the government with SEZ proposals. Another important point that Sabde makes in his article is regarding what it calls the 'great export lie' that is being propagated. The SEZ policy of the Maharashtra government does not have a clause to prevent the goods manufactured in the SEZs from being sold within the country – companies can do so if they pay sales tax on the goods, which is a small thing considering the mammoth sops that they will be getting in terms of 100 per cent Foreign Direct Investment, 100 percent exemption from stamp duty and registration charges, customs, service tax, 100 per cent exemption from income tax for five years and so on, apart from substantial subsidies on electricity and water.

'Company Sarkar' by Sampreet Singh records the violence and oppression that has gone into land acquisition for SEZs, in Maharashtra and elsewhere. At Dadari, UP, the police resorted to firing and lathi charge to remove protesters from land acquired by Reliance Energy Generation Limited. In Raigad, Maharastra, police firing was supplemented by violent and intimidating activities by local criminals, who, according to Singh, were appointed by Reliance to do so. The article expresses concern that Reliance, which has control of 60,000 out of the 1,40,000 acres of land sanctioned till date in the name of SEZs, is going to emerge as the largest landlord in the country, and leaves the implications open for consideration.

One useful article in the booklet is 'Tisri Mumbai' (Third Mumbai) by Alka Dhupe. This is an investigative case study of the proposed Maha Mumbai SEZ which is to come up adjoining the present Mumbai city (land in Raigad district is being procured for this project). Unlike the other articles, this one questions the viability of the very idea of SEZs in infrastructural, social and economic terms. Of the 14,000 plus acres of land required for the SEZ, the procurement process of 10,000 acres is yet to begin. And what with stiff resistance from farmers, the entire process could take a lot of time, which would make the 10-year deadline sound too optimistic.

Dhupe's article goes into the compensation issue as well. According to the law, when land is acquired, market prices of lands nearby is taken into account. A committee for the rights of project-affected persons, led by D B Patil is working on this issue in Maha Mumbai. Recently, in this connection, a committee led by former Supreme Court judge Sujata Manohar had determined a price of Rs.5,000 per square meter, which amounts to Rs.2 crore per acre. (The current land price in Navi Mumbai is Rs.55,000 to Rs.75,000 per square metre.) Patil is demanding that this should be kept in mind while determining land prices.

But the government and Reliance sources are silent on the actual price being offered to the farmers. Shyam Vardhane, joint secretary of the state's Urban Development department, said that it will not be proper to discuss compensation amounts since notifications have not yet been issued. But the secrecy has also forced many farmers to sell their lands off to private agents for fear that they may get even less from the government. No compensation has been proposed for the landless.

There are other worries. The Maha Mumbai SEZ's massive water requirement is to be met by the Hetwana and Morba dams in Pen and Khalapur tehsils respectively, but the activists worry about capacity problems at Hetwana reservoir. Activist Surekha Dalvi notes ruthless exploitation of water sources will cause rapid ground water depletion in the area. The Raigad district irrigation department has proposals for nine medium and 14 small dams, but apart from the huge investment involved, it will create a burgeoning rehabilitation problem. To add to all this is the trans-harbour line to connect Mumbai with Maha Mumbai. It will cost thousands of crores of rupees over and above the cost of developing the SEZ. The large number of labourers required for all the construction work will likely cause an expansion in Mumbai's slum areas.

With so many complications involved, will this SEZ finally materialise at all? And finally for what? What kind of a development goal is one that will render around 50,000 farmers landless (per SEZ), destroy livelihood sources for a much larger number of people, pull all the stops against exploitation of labour and cause huge chunks of resources, private and otherwise, to pass on into private hands? Is the administration prepared for the huge backlash of discontent, protest and social upheaval that oppression on such large scale could trigger? These questions are not going to be easy to answer.

And finally, does the country need Special Economic Zones? Putting it succinctly at the end of his article, Sampreet Singh says Special Justice Zones would have been more appropriate for India at this juncture!