Why not SEZs in the Chambal ravines?
http://www.hardnewsmedia.com/portal/2006/11/658
These massive zones is an all time wild killing made by real estate big guns
in the name of the holy cow called exports
Kamal Nayan Kabra Delhi
On the face of it, the special economic zones (SEZs) controversy showcases
the vibrancy of Indian democracy or the precarious political support-base of
the ruling coalition, which sometimes makes it nervously retrace the
one-sided, non-popular steps. However, the well-entrenched liberalisers will
just not allow genuine pro-people changes go beyond artificial media hype.
Besides, the prime minister has unequivocally asserted that the SEZs are
here to stay as an essential part of the 'reforms'.
Thus, it is not surprising that both, relatively and absolutely, the main
beneficiaries of the SEZs would be the developers and co-developers of the
zones (the Indian and foreign companies, with or without state partnership).
In orchestrated symphony will be the controllers of the units set up in the
zones, building contractors, suppliers of various inputs, the foreigners who
may import these highly subsidised exports from India and the
political-bureaucratic elite (the cronies) that designed this policy and
will thereby administer the zones jointly with the developers.
It is evident that the aam adami is nowhere among these beneficiaries,
though the major costs would have to be borne by ordinary Indians. On
account of various tax exemptions alone, the benefits to the units in these
zones have been placed at a whopping sum of Rs 1.75 lakh crore by the
International Monetary Fund (IMF). The loss of food output and livelihoods
of millions, owing to overblown demand for land, (running into two lakh
hectares for over 200 SEZs sanctioned so far), will jeopardise macro and
micro food security of two million to three million persons directly and
many times indirectly.
The SEZs, with vast tracts of prime land, have been liberally sanctioned to
major real estate companies without proven industrial or export competence,
and without a provision for penalties or even the refund of the bountiful
largess doled out to them should the expected exports and employment were
not to materialise. Given this and the inevitable, sharpening uncertainties
and fierce competition, characteristic of the global market, it's not
unlikely that a good number of the sheds built in the zones may well remain
unoccupied; the output may fail to win external markets. The wild spree of
granting approvals to SEZs is propelled on the assumption that there is an
infinite demand for Indian exports. Hence, the danger that the developers
will finally turn the SEZs into real estate hubs located close to mega
cities on the land snatched cheaply from the farmers is real.
This, then, is an all-time wild killing made by real estate big guns in the
name of the holy cow called exports.
The cost of these artificially propped-up SEZs would be borne by the farmers
and rural workforce, which would lose their land, livelihood and labensbraum
— living space. That is the very foundation of their human-social existence.
It would be totally unrealistic to presume that the new units would provide
them with fair, viable and dignified alternatives in the form of jobs,
compensation, fair price, etc. Even importable goods, bought with export
earnings, have a rather slim chance of having anything to do with the needs
of the majority of low and irregular income earners who constitute the real
India. This makes the liberal diversion of resources and artificially
boosted profitability of highly problematic exports a deadly blow to the
rights of the aam adami.
It has been proposed that once formed the SEZs will move out of the reach of
the normal law of the land. The developers (merchants who will become
monarchs of the territories 'ceded' to them) would get economic and
administrative control of miles and miles of contiguous land in prime
locations (bye-bye to democracy!) with little social/public control over the
pattern of its use, resale, etc. The provision of housing complexes for the
people, along with the provision of civic amenities (including commercial
complexes) along with what is described as 'world-class infrastructure'
clearly imply that the non-processing areas would be areas earmarked for
real estate development. An equivalent of princely states that existed under
the indirect rule of the British are being created to propitiate the
simulated gods of growth and exports.
There is no assurance that the entire processing area would be taken up by
the new investors. A strong combination of factors has emerged to put a
serious question mark on the supply-side factors determining the export
potential of the Indian economy, especially of manufactured goods exports,
unless there emerges powerful demand side factors—an unlikely event, as
indicated by the stalling of the WTO negotiations owing to the re-emergence
of powerful neo-protectionist lobbies in the rich, industrialised countries.
Indeed, the manufacturing sector has been showing dynamism in India only in
fits and starts owing to structural constraints and the tendency of the
early manufacturing giant conglomerates is to branch out in the services
sector, like retail trade, real estate, finance, telecommunications, power
and information technology.
The mid-term appraisal of the Tenth Plan by the Planning Commission noted
the existence of abnormally high, unused manufacturing sector capacity
(between 12 and 18 per cent in the recent past), reflected also in lakhs of
industrial enterprises that have been closed down or are sick and are
defaulters of bank loans necessitating writing off of over Rs 45,000 crore
of loans. The fact that dozens of countries like India have been forced by
the global hegemonic powers to go in for structural adjustment and hence
give top-most priority to export production to serve the debts, is a factor
limiting our export potential.
These factors indicate that one of the major options available to the SEZs
would be to concentrate on real estate business. This sector is bound to
show a lot of buoyancy as India's unfathomable black wealth finds real
estate as an attractive investment/ostentation destination, especially as
the speculator-investor community keeps generating attractive capital gains
in addition to providing a safe haven for the undeclared wealth of business
persons, politicians, bureaucrats and the growing land mafia. To these may
be added the education/ health sector private investors, especially those
wanting to set up super-deluxe facilities for the super rich and the medical
tourists from abroad, with foreign collaborations, to shore up their
marketability.
The point is that in the name of export production in the manufacturing
sector, an unlimited number of SEZs are being set up without any upper
limit, either on the number of zones or size of the land area. The idea of
placing a cap on their number has been defeated just as SEZ enthusiasts
refuse to limit the size of any single zone. Over two lakh acres of land has
been committed to these zones.
No one seems concerned that since 1960-61, almost 7.5 crore acres have moved
out of agriculture. The SEZs have been given an unprecedented special
treatment in land acquisition and other benefits, by an Act of Parliament,
as if this is the most dynamic engine of growth. This law has been accorded
an overriding status, capable of nullifying the provisions of any other law
that is in conflict. This has ominous implications.
The intention of the special SEZ law goes much beyond the objective of
export promotion. Even export promotion cannot be given top priority. We are
a nation with formidable domestic problems of poverty, unemployment,
disparities and growing threats to the social and ecological balances. The
rest of the world can't supply the goods and services needed by the masses,
which must get a secure livelihood with steady improvement in their quality
of life. It's clear that home-based production for the home market has an
incomparably higher priority than elusive exports for earning the exchange
that mainly goes to satisfy the frivolities of the rich, such as 700 to 800
tonnes of gold imports annually. Most of our imports have little meaning for
the great bulk of Indians.
What strikes at the very rationale of the SEZs is that the kind of growth
and exports visualised by the framers of the policy just can't materialise
owing to a combination of domestic and external factors. In the bargain
there would be a reverse kind of qualitative transformation of the land-use
pattern (irrespective of the quality, except if they are given the ravines
of Chambal!) with incalculable socio-economic outcomes in critical spheres,
like livelihood, dependence on food imports, social equity and conflict (In
a proposed SEZ near Mumbai, farmers have openly asserted that instead of
committing suicides, they would choose to kill!). Those who are mesmerised
by the alleged employment generation do not seem to reckon with the nature
of the exports to the rich countries—our main trading partners—and the
technology associated with their production. These exports cannot have any
appreciable net positive impact on employment generation, as they are
obtained by diverting resources away from mass-consumption goods needed by
the Indians.
With little progress in getting a manufacturing sector breakthrough, the SEZ
developers would be forced to either leave the land and facilities unused or
make use of the possibilities contained in the SEZ law. Here, the framers of
this law have shown marvellous prescience. They have defined 'manufacturing'
in an entirely unheard of, totally illogical, unscientific and ridiculous
manner. After giving the usual definition of manufacturing, the SEZ Act goes
on to stipulate that manufacturing "includes agriculture, aquaculture,
animal husbandry, floriculture, horticulture, pisciculure, sericulture,
viticulture and mining". Economics has never been turned so ludicrously
upside down.
The real long term interests of the country have been put on the block by
the SEZ policy. It would be another futile exercise to woo the investors
with one-sided sops (tax havens, etc, including fertile land full of natural
resources and minerals) without imposing any reciprocity and performance
norms. Even if the assumptions underlying the SEZs remain elusive, the
investors would still be happy as they would come to own and control highly
valuable real estate and would be able to enter farming and allied
activities. The peasantry and ordinary citizens, who would have to forgo the
public services the state would not be able to supply as it forgoes massive
amounts of revenue, and the young who would have to do without their
land-based occupations, would pay a huge price for this massive
misadventure. The whole exercise backed by such a one-sided law has to be
totally recast on solid socio-economic and earthy grounds, may be in terms
of village and small town clusters of small and medium enterprises producing
mass consumption goods for the greater common good.
http://www.hardnewsmedia.com/portal/2006/11/658
These massive zones is an all time wild killing made by real estate big guns
in the name of the holy cow called exports
Kamal Nayan Kabra Delhi
On the face of it, the special economic zones (SEZs) controversy showcases
the vibrancy of Indian democracy or the precarious political support-base of
the ruling coalition, which sometimes makes it nervously retrace the
one-sided, non-popular steps. However, the well-entrenched liberalisers will
just not allow genuine pro-people changes go beyond artificial media hype.
Besides, the prime minister has unequivocally asserted that the SEZs are
here to stay as an essential part of the 'reforms'.
Thus, it is not surprising that both, relatively and absolutely, the main
beneficiaries of the SEZs would be the developers and co-developers of the
zones (the Indian and foreign companies, with or without state partnership).
In orchestrated symphony will be the controllers of the units set up in the
zones, building contractors, suppliers of various inputs, the foreigners who
may import these highly subsidised exports from India and the
political-bureaucratic elite (the cronies) that designed this policy and
will thereby administer the zones jointly with the developers.
It is evident that the aam adami is nowhere among these beneficiaries,
though the major costs would have to be borne by ordinary Indians. On
account of various tax exemptions alone, the benefits to the units in these
zones have been placed at a whopping sum of Rs 1.75 lakh crore by the
International Monetary Fund (IMF). The loss of food output and livelihoods
of millions, owing to overblown demand for land, (running into two lakh
hectares for over 200 SEZs sanctioned so far), will jeopardise macro and
micro food security of two million to three million persons directly and
many times indirectly.
The SEZs, with vast tracts of prime land, have been liberally sanctioned to
major real estate companies without proven industrial or export competence,
and without a provision for penalties or even the refund of the bountiful
largess doled out to them should the expected exports and employment were
not to materialise. Given this and the inevitable, sharpening uncertainties
and fierce competition, characteristic of the global market, it's not
unlikely that a good number of the sheds built in the zones may well remain
unoccupied; the output may fail to win external markets. The wild spree of
granting approvals to SEZs is propelled on the assumption that there is an
infinite demand for Indian exports. Hence, the danger that the developers
will finally turn the SEZs into real estate hubs located close to mega
cities on the land snatched cheaply from the farmers is real.
This, then, is an all-time wild killing made by real estate big guns in the
name of the holy cow called exports.
The cost of these artificially propped-up SEZs would be borne by the farmers
and rural workforce, which would lose their land, livelihood and labensbraum
— living space. That is the very foundation of their human-social existence.
It would be totally unrealistic to presume that the new units would provide
them with fair, viable and dignified alternatives in the form of jobs,
compensation, fair price, etc. Even importable goods, bought with export
earnings, have a rather slim chance of having anything to do with the needs
of the majority of low and irregular income earners who constitute the real
India. This makes the liberal diversion of resources and artificially
boosted profitability of highly problematic exports a deadly blow to the
rights of the aam adami.
It has been proposed that once formed the SEZs will move out of the reach of
the normal law of the land. The developers (merchants who will become
monarchs of the territories 'ceded' to them) would get economic and
administrative control of miles and miles of contiguous land in prime
locations (bye-bye to democracy!) with little social/public control over the
pattern of its use, resale, etc. The provision of housing complexes for the
people, along with the provision of civic amenities (including commercial
complexes) along with what is described as 'world-class infrastructure'
clearly imply that the non-processing areas would be areas earmarked for
real estate development. An equivalent of princely states that existed under
the indirect rule of the British are being created to propitiate the
simulated gods of growth and exports.
There is no assurance that the entire processing area would be taken up by
the new investors. A strong combination of factors has emerged to put a
serious question mark on the supply-side factors determining the export
potential of the Indian economy, especially of manufactured goods exports,
unless there emerges powerful demand side factors—an unlikely event, as
indicated by the stalling of the WTO negotiations owing to the re-emergence
of powerful neo-protectionist lobbies in the rich, industrialised countries.
Indeed, the manufacturing sector has been showing dynamism in India only in
fits and starts owing to structural constraints and the tendency of the
early manufacturing giant conglomerates is to branch out in the services
sector, like retail trade, real estate, finance, telecommunications, power
and information technology.
The mid-term appraisal of the Tenth Plan by the Planning Commission noted
the existence of abnormally high, unused manufacturing sector capacity
(between 12 and 18 per cent in the recent past), reflected also in lakhs of
industrial enterprises that have been closed down or are sick and are
defaulters of bank loans necessitating writing off of over Rs 45,000 crore
of loans. The fact that dozens of countries like India have been forced by
the global hegemonic powers to go in for structural adjustment and hence
give top-most priority to export production to serve the debts, is a factor
limiting our export potential.
These factors indicate that one of the major options available to the SEZs
would be to concentrate on real estate business. This sector is bound to
show a lot of buoyancy as India's unfathomable black wealth finds real
estate as an attractive investment/ostentation destination, especially as
the speculator-investor community keeps generating attractive capital gains
in addition to providing a safe haven for the undeclared wealth of business
persons, politicians, bureaucrats and the growing land mafia. To these may
be added the education/ health sector private investors, especially those
wanting to set up super-deluxe facilities for the super rich and the medical
tourists from abroad, with foreign collaborations, to shore up their
marketability.
The point is that in the name of export production in the manufacturing
sector, an unlimited number of SEZs are being set up without any upper
limit, either on the number of zones or size of the land area. The idea of
placing a cap on their number has been defeated just as SEZ enthusiasts
refuse to limit the size of any single zone. Over two lakh acres of land has
been committed to these zones.
No one seems concerned that since 1960-61, almost 7.5 crore acres have moved
out of agriculture. The SEZs have been given an unprecedented special
treatment in land acquisition and other benefits, by an Act of Parliament,
as if this is the most dynamic engine of growth. This law has been accorded
an overriding status, capable of nullifying the provisions of any other law
that is in conflict. This has ominous implications.
The intention of the special SEZ law goes much beyond the objective of
export promotion. Even export promotion cannot be given top priority. We are
a nation with formidable domestic problems of poverty, unemployment,
disparities and growing threats to the social and ecological balances. The
rest of the world can't supply the goods and services needed by the masses,
which must get a secure livelihood with steady improvement in their quality
of life. It's clear that home-based production for the home market has an
incomparably higher priority than elusive exports for earning the exchange
that mainly goes to satisfy the frivolities of the rich, such as 700 to 800
tonnes of gold imports annually. Most of our imports have little meaning for
the great bulk of Indians.
What strikes at the very rationale of the SEZs is that the kind of growth
and exports visualised by the framers of the policy just can't materialise
owing to a combination of domestic and external factors. In the bargain
there would be a reverse kind of qualitative transformation of the land-use
pattern (irrespective of the quality, except if they are given the ravines
of Chambal!) with incalculable socio-economic outcomes in critical spheres,
like livelihood, dependence on food imports, social equity and conflict (In
a proposed SEZ near Mumbai, farmers have openly asserted that instead of
committing suicides, they would choose to kill!). Those who are mesmerised
by the alleged employment generation do not seem to reckon with the nature
of the exports to the rich countries—our main trading partners—and the
technology associated with their production. These exports cannot have any
appreciable net positive impact on employment generation, as they are
obtained by diverting resources away from mass-consumption goods needed by
the Indians.
With little progress in getting a manufacturing sector breakthrough, the SEZ
developers would be forced to either leave the land and facilities unused or
make use of the possibilities contained in the SEZ law. Here, the framers of
this law have shown marvellous prescience. They have defined 'manufacturing'
in an entirely unheard of, totally illogical, unscientific and ridiculous
manner. After giving the usual definition of manufacturing, the SEZ Act goes
on to stipulate that manufacturing "includes agriculture, aquaculture,
animal husbandry, floriculture, horticulture, pisciculure, sericulture,
viticulture and mining". Economics has never been turned so ludicrously
upside down.
The real long term interests of the country have been put on the block by
the SEZ policy. It would be another futile exercise to woo the investors
with one-sided sops (tax havens, etc, including fertile land full of natural
resources and minerals) without imposing any reciprocity and performance
norms. Even if the assumptions underlying the SEZs remain elusive, the
investors would still be happy as they would come to own and control highly
valuable real estate and would be able to enter farming and allied
activities. The peasantry and ordinary citizens, who would have to forgo the
public services the state would not be able to supply as it forgoes massive
amounts of revenue, and the young who would have to do without their
land-based occupations, would pay a huge price for this massive
misadventure. The whole exercise backed by such a one-sided law has to be
totally recast on solid socio-economic and earthy grounds, may be in terms
of village and small town clusters of small and medium enterprises producing
mass consumption goods for the greater common good.