As easy as SEZ?

A lot has happened since those early debates around the SEZ act. However, I still stand by what I said last year, SEZs are one of those “admission of failure” things. Ask me how.

Who exactly decides, and how, as to what areas are fit to be an SEZ? Some say use non-arable land, some prefer poorer regions, some say fertile or junk, use land that is best for a given industry from location standpoint. Pick your favorite argument, but who is making the decision here? More than being transparent, how participative is this decision making process? From what we know so far, the process is neither transparent nor participative.

ExpresswaySo, shall we say the policy is not democratic? And that it goes against the very spirit of decentralization and local governance the same government has been preaching via the likes of Mani Shankar Aiyer and others? Why can’t we focus all our energies on enabling semi-urban areas of our ‘hinterland’ to create environments that entice industries? What if those small cities had enough power to formulate SEZ like acts in their jurisdiction areas? Imagine small cities competing with each other to attract investment, wouldn’t that be far more democratic and healthy?

[Note: That photo is an exit on Mumbai-Pune expressway, just some image to show ‘infrastructure’]

Next, seems like there are two aims getting mixed up here – creating jobs in the hinterland, and involving private players in building infrastructure. Yes, if you do the later, former will follow. What you see on the other hand is government indulging in job creation itself via direct and arguably inefficient means like NREGS (rural employment guarantee scheme). A recent report from ESCAP said that Rs 10 lakhs spent on building road in a village is seven times more effective in poverty alleviation than same amount spent on NREGS like scheme.

If building infrastructure is the agenda, why isn’t government going full steam on that via investments in power and transportation sector? Why hedge and get distracted into Nandigram and Posco like debates? Build good roads, generate lots of electricity, please, just focus on these two and the whole country will be your SEZ.

So, while the intentions are all good, and efforts to build infrastructure via private participation will be similar to running an SEZ type policy (tax soaps, key areas targeted first etc), over-stressing on the “SEZ” word and “land” instead of “roads, power and jobs” has only distracted us from our eventual goal

So there, that is my humble opinion. The worst type of argument I hear in support of SEZs is – something (infrastructure via SEZ) is better than nothing (no infrastructure). Oh, what a choice! Give me a break, don’t force us to live in this well of low expectations any more!

The revamped SEZ policy meanwhile seems closer to getting acceptance. Amongst latest developments there, I am happy to read that Jharkhand and Orissa governments are talking something I mentioned last year – giving equity and not just cash to the displaced!


5 Responses

  1. Good, insightful article.

    “Over-stressing on the SEZ word and ‘land’ instead of ‘roads, power, education, ports, airports, and so on…”

    I suspect this ‘distraction’ is intentional on the left-leaning Government’s part, rather than co-incidental. Gives them an opportunity to create chaos and confusion, rather than let everyone see their abject failure in the most basic – and primary, IMHO – responsibility of road, power, health, and education.

  2. Thanks Mahendra. Do you think the government intentionally created this distraction. I think the government went rather too fast in copying and overdoing the chinese SEZ concept because of its leftist crutches. And folks didn’t debate this enough. It is simply an un-democratic thing, guess that is why it worked in China.
    We all want jobs, and development of our regions. If they think SEZs are good, let us have all 3.28 million square kilometers of our country declared as an SEZ!

  3. Hi Silkboard, surprising as it may sound, I don’t think copying the SEZ concept from China was a result of the leftist crutch. Indian communist parties no longer believe or adopt anything from the China story.

    Moving too fast in copying the Chinese SEZ story is the result of our centrist/rightist Manmohan/Chidambaram movement, thinking that if they copy China, the Indian communists won’t be able to debate it a lot or challenge it, since China has already done it. They cannot afford to encourage capitalism in this country in any form, since the Left would oppose it. So they choose China’s model, thinking that if communist China has done it, it would be palatable to Indian communists…

    You are extremely spot-on when you point out that SEZs have worked in China as it is a fundamentally un-democratic concept! And yes, why not open the whole of the country as an SEZ? That would be really cool, wouldn’t it? But no, our babus need regulations, licenses, and approvals, a legacy of the permit raj! Without it, where would they be? They need to be involved in each and every step, ready to take bribes, accept cajoling, demonstrate to the masses that they’re also ‘protecting their land’, show their leadership in rejections, and so on…:-)

    Unfortunate, but true. Thanks to your article for raising all these points and issues…

  4. […] answers now. Anyone has any valid ones? If you have read my earlier posts, I am not a big fan of the SEZ idea as such. Even then, I don’t see them to be that bad a thing provided all the land acquisition […]

  5. I feel that SEZ is a good source of employment and uplifting economy. Yes! there are disadvantages to it but, there’s no way to refuse the change which SEZ can bring. The government along with SEZ must also focus on infrastructucture and development of the civil life…

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