How special are those economic zones?

This blog comes three months late. Often I wonder why we take our client deadlines seriously but neglect our personal ones. We are being too harsh on ourselves perhaps. It is an interesting topic on which I shall dwell in detail later. But for now, here I go. This is about Special Economic Zones in India, shortly SEZ.

As I often do, here’s debrief for the starters. Some where in the early 2000s, our Indian government set up a system called Special Economic Zones, fondly called SEZs. In this scheme, the government identifies a bunch of area for industrial purpose, acquires it, and leases them out to business houses who build large industries in that area. They get tax benefits, relaxed labour laws and uninterrupted infrastructure support.

Ever since the SEZs were identified, there have been protests all over India and in some areas the protesters have even succeeded in halting the progress of the zones.

Before I tell you why people are protesting, I must tell you what my stand on SEZs is. I strongly oppose the very idea called SEZs. Now that I shared my stand, I shall go ahead and tell you why I feel so.

First off, SEZs were identified mooted and executed by the central government. I’m not comfortable with government interfering with business and hence I don’t like them helping it either. In 60s and 70s, they were anti-business in turn fuelling an era of corruption, bigotry, and License Raj. And in 90s, when they are pro-business, I fear, they are trying to unleash the same.

Consider this: If you want to set up business house and you want around 500 acres of land, I ti snot easy for you to buy. First off, it’s not easy to buy so much of land at a place of your preference. And when you do, you will also require roads, power, water, and connectivity. So what do you care when you get everything on a silver platter garnished with tax holidays and no labour restrictions?

Well, what’s wrong with that you might ask. Everything. First off, those 500 or so acres usually belong to small farmers who own a meager acre or so and depend on it for their livelihood. Government pays them a pittance and ‘snatches’ the land away from them. You don’t object this because you are told that this is being done for the sake of economic development. So you shed a couple of tears for those farmers, shrug your shoulders and say ‘well, somebody has to suffer otherwise the economy won’t develop’. After all they get compensated, won’t they?

Well, this somebody is always the farmer, the tribal, or the peasant whose name you don’t know and whose face you don’t see. Often, there are peasants working for these farmers who also depend on their land and they don’t get compensated at all because they are not ‘project affected’.

Then how else do we set up such zones? My first question is why government should involve in this. They have no bloody business to be in business. The politicians identify a zone for ‘development‘, quietly buy the adjacent lands at throw-away prices and then announce a new ‘industrial zone’ there. Snatch the ‘identified’ area from the farmers and landlords and then when the area booms, sell the lands they own or make a joint-venture with the real estate sharks that make a killing. And not to speak of the ‘deal’ they strike with the business-houses because they get their ‘wholesale’ land without a sweat.

These SEZs were quite a success in places like China and Singapore. For long, I’ve mentioned that I would not compare India or any other country with China’s economic development, for I don’t know at what cost they’ve ‘bought’ their double-digit growth. Once in a while, we hear of one sweat-shop here or one there in China but due to the nature of the government there, you don’t get any news at all. They’ve built their Three Gorges dam at a huge human cost. They have rammed their tankers on their own students, which even the most atrocious dictators couldn’t do. With this background it’s not difficult to imagine how these SEZs could have been built satisfactorily.

Thanks to our democracy and free press, such atrocities couldn’t remain quiet. It came out blatantly during the construction of Narmada dam. SEZs are revisiting those horrendous memories.

Don’t get me as leaning on left. You are Left if you support SEZs, because you believe that government can help business. I believe government can help business by actually not coming near them. Tata, Ambani or Murthy built their empires without SEZs. In fact, despite government controls. The 90s saw a huge surge in entrepreneurial spirit because people felt that they won’t have to face many government officials, and that was encouraging.

Left the business houses talk to the farmers directly. Let the governments move out of the table and do their job for which we’ve sent them there.

That is governing.