| SEZs have become the most talked about in the | | | | Capping months of debate on the pros and cons of |
| Indian economic circles, its lack of clear policy has | | | | developing Special Economic Zones (SEZs), the |
| provoked strong opposition from leftist political parties, | | | | commerce ministry has issued a caveat that prime |
| activists, farmers groups, economists and urban | | | | agricultural land should not be used for business |
| planners. However the government of India is moving | | | | purposes India's commerce ministry has asked the |
| ahead with the programme to set up special economic | | | | chief ministers of all Indian states to ensure that prime |
| zones (SEZs) to trigger a manufacturing wave in the | | | | agricultural land was not allotted to business houses for |
| country. Amid evidence of an undercurrent of rural | | | | development as Special Economic Zones (SEZ), and |
| hostility to giant industrial zones coming up on | | | | that in any event agricultural land must not exceed |
| agricultural land, Posco, a South Korean steel company, | | | | 10% of the land allotted. The commerce ministry's |
| was last week permitted to set up a 1,600ha SEZ in | | | | clarification, which also underlines that farmers be |
| mineral-rich Orissa state. | | | | adequately compensated for their land and |
| Posco plans to invest 530 billion rupees (S$18 billion) in | | | | rehabilitated fairly, comes in the face of mounting |
| the zone. Some 30 other SEZ applications have now | | | | concern that diverting agricultural land for the |
| won the backing of the Board of Approvals, taking the | | | | development of business interests, that too at |
| total number of SEZ proposals cleared to 181. The | | | | government rates, was riding roughshod over the |
| government sees boosting manufacturing as crucial to | | | | interests of India's farmers. This has come as a reality |
| balancing the country's economic growth. Untypical for | | | | check for state governments that have been |
| a developing country, India's services sector | | | | aggressively pushing their SEZ proposals for clearance |
| contributes about 54 per cent of GDP. Economists | | | | from the Centre. So far, the Indian government has |
| say a China-style push to manufacturing is needed to | | | | handed out over 150 licenses to set up SEZs; another |
| provide jobs for the unemployed and those migrating | | | | 200 applicants are on the waiting list. However, the |
| from farm work. | | | | chief minister of Andhra Pradesh - the biggest |
| But SEZs also have raised some controversy in India. | | | | beneficiary of SEZs so far has categorically ruled out |
| Finance Minister P. Chidambaram has warned of | | | | any review of SEZs already cleared for the state. It |
| massive revenue losses because of the tax breaks | | | | said that SEZs should serve as a bridge between rural |
| accorded to companies in the zones. With SEZ being | | | | and urban economies. The concept of PURA |
| under the charge of the Commerce Ministry, there has | | | | (Provision of Urban Facilities in Rural Areas), which is |
| been a turf war of sorts between him and Commerce | | | | how developed countries have holistically |
| Minister Kamal Nath. As well, several political leaders | | | | conceptualized their rural habitations, needs to be |
| are uncomfortable about pushing farmers off land in a | | | | remembered at a time when India is entering an era of |
| nation where six in 10 people depend on agriculture for | | | | SEZs. The explosion in the economy envisaged |
| a living. Mrs. Gandhi, who chairs the ruling coalition, said: | | | | through SEZs will have to be linked to integrated |
| 'Prime agricultural land should not be diverted to non- | | | | infrastructure in rural and urban areas. India should |
| agricultural uses and, even if this is resorted to for | | | | focus on comprehensive and integrated spatial planning |
| unavoidable reasons, this should not jeopardize | | | | within and beyond SEZs. This however is a dream |
| agricultural prospects.' | | | | come true here. |