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SEZ benefits too many to lose 'site' of

, TNN|
Jan 19, 2007, 01.01 AM IST
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NEW DELHI: Controversies have surrounded the special economic zones (SEZs) policy right from the time the rules guiding the policy were notified in February last year.

Whispers about alleged land-grabbing, which started early last year, have gradually taken the shape of violent protests in some parts of the country. While there is no question about the urgent need to address the concerns of the farming community, the government has to ensure that the baby doesn���t get thrown out with the bathwater.

The fact that the SEZs have managed to attract high investments in a short period of eleven months and also generated a modest number of jobs is a reminder of why the government went in for a SEZ policy and why it should be preserved. When a policy of such an enormous magnitude is implemented, it is not surprising that it gives rise to problems and controversies.

In a way, it is important for protests to be registered as it can act as a check against the policy going wrong or its implementation going haywire. A good example could be the notifications issued by the Centre in August last year to prevent operating units from relocating in SEZs.

The protests against land-grabbing has also made the government sit up and take notice. It has, in fact, forced Congress President Sonia Gandhi to intervene and Prime Minister Manmohan Singh to order a relook at the policy. But that certainly does not spell the death-knell of the policy itself.

The empowered group of ministers, which is meeting on January 22, is expected to minutely inspect every aspect of the existing policy and come up with ways to tighten it to check misuse. The objective is to plug every loophole which could lead to undue harassment of farmers and villagers.

The government should, however, refrain from putting caps on SEZs at this stage. To be fair to the policy, it has managed to attract large investments, which otherwise would not have come in such a short time. An investment of a whopping Rs 11,900 crore has been made since February last year creating 15, 812 jobs.


A total of 63 SEZs have been notified and several more are in the pipeline. When work in these SEZs begin full scale in the next two years, total investments is likely to go up to Rs 58,000 crore and employment generation increase to 8.9 lakh. The numbers are just too big to ignore.

While the government is doing the right thing by tightening restrictions, it should not lead to the strangulation of the policy itself. Instead of resorting to actual caps, which could lead to creation of a secondary market, the government should let the tightened rules act as a tool to keep a check on burgeoning numbers.

Lastly, it is incorrect to assume that if the government works for farmers and villagers interest, it would necessarily mean going against the interests of industry. There are hectares and hectares of barren and uninhabited land all over the country where SEZs could come up. In fact, such SEZs could prove to be a boon for the people living in the neighbouring villages or town who could find employment in the zones.
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