Abstract
Examining the case of a Special Economic Zone in Gujarat, where resistance to the diversion of land for industry-infrastructural development has, by and large, been relatively low or dormant, the chapter brings out the varied outcomes of land diversion. In the wake of a fast-track mode for land conversion, which involves a nexus of private investment, illegal land grabbing and political patronage, it was noted that communities in the region, including farmers, have gained substantial economic benefits and have also made investments in land and other assets. Those mainly based on agriculture have moved out to small business and/or started small business and related activities, although their links with agriculture continue. There has also been an increase in casualisation and in-migration of labour.
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Notes
- 1.
Special Economic Zone (SEZ) is defined in the Foreign Trade Policy (2003) of India as ‘a specifically delineated duty free enclave and shall be deemed to be foreign territory for the purpose of trade operations and duties and tariffs’. The Comptroller and Auditor General of India defines the SEZs as ‘A Special Economic Zone is a geographical region within a Nation State in which a distinct legal frame-work provides for more liberal economic policies and governance arrangements than prevail in the country at large’ (CAG 2014, p. 1).
- 2.
While the claims of the government as per the Fact Sheet are impressive, such optimism has been challenged by the Comptroller and Auditor General of India in its Report on SEZs presented to Parliament in 2014. The report mentions, ‘Though the objective of the SEZ and the fact sheet on … its performance claimed large scale employment generation, investment, exports and economic growth, however, the trends of the national databases … on economic growth of the country, trade, infrastructure, investment, employment, etc. do not indicate any impact of the functioning of the SEZs’ (p. 10).
- 3.
In September 2013 a new Act, namely the Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (RTFCATILARR Act), came into force. The government claimed that this Act gives voice to the people as it has significant participation of Panchayats. The new Act was claimed to ensure equitable compensation and fair resettlement and rehabilitation of farmers and land owners. However, despite this Act, as we will see later, almost nothing has changed on the ground. Now there is a move to amend this Act to facilitate the acquisition of land for SEZs and thus for the profiteering of the private sector. On 31 December 2014, the newly elected union government promulgated an ordinance1 to amend the Act. However, given its lack of majority in the Rajya Sabha, it has, as of now, been unable to pass the bill through Parliament, but to date the ordinance’s amendments stand.
- 4.
In a study of the Mahindra World City SEZ, a multi-purpose ‘integrated industrial city’ 25 km from Jaipur, which is supposed to include the largest IT-SEZ in India, Levien (2012) demonstrated how the whole process of profiteering operates with the collusion of the government. He writes, “To facilitate this project by the real estate subsidiary of the $7 billion Mahindra and Mahindra Company in partnership with RIICO, the Rajasthan government (through the Jaipur Development Authority) acquired 3000 acres of land in 9 villages, of which 2000 acres area was privately owned farmland and 1000 acres was common grazing land (officially owned by the government). As government land, the latter was transferred to the company with no compensation to the surrounding villages that were highly dependent on the livestock economy it supported. The private land, under a special Rajasthan state policy, was compensated by awarding farmers small developed plots of land next to the SEZ totalling one quarter the size of their original land, thus giving them a small stake in the inevitable real estate appreciation. This did not create a ‘negotiated’ consensus around a ‘fair deal’, aside from some political elites, farmers were anyway not consulted.” (p. 946)
“Once enough industry is up and running, Mahindra will create luxury residential townships – in what they call the “Lifestyle Zone” – on about 40 per cent of the area. But it must be remembered that the SEZ developer is a state-appointed rentier and receives it’s land via dispossession rather than the market, which makes its land artificially cheap.” (p. 947)
“Using documents obtained through the Right to Information Act and interviews with Mahindra officials, I have attempted to calculate this rate for the MWC. If we group together the state and private land, the average price paid by Mahindra to the state government (including administrative fees for acquisition) was $22,679 per acre. Mahindra officials told me that their development costs were $66,000 per acre (to build “world-class infrastructure”) and they are currently selling industrial land for $55 per sq. meter or $224,000/acre. This makes for a profit of $135,000 per acre for industrial land parcels; it will be many times greater when they start developing more expensive residential space.” (p. 947–48)
“If we take as a benchmark for the latter the $137 per sq. m (or $554,420 per acre) rate for residential plots in the nearby Jaipur Greens housing development just adjacent to the SEZ (which itself should rise over time as the SEZ develops), then the profit will ultimately be over $465,000 per acre in this section of the project. We can say, then, that the rate of accumulation by dispossession (the ratio of the final sale price of the land to its cost of acquisition and development multiplied by 100) will be 253 per cent on the industrial land and 625 present on the residential land, or a simple average rate of 439 per cent’ (Levien 2012, pp. 946–948).” (p. 948)
- 5.
The CAG analysed a representative sample of 187 developers and 574 SEZ units spread across 13 states (Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, and West Bengal) and the union territory of Chandigarh for the period 2012–13.
- 6.
‘Nowhere have farmers had it so good as Jamnagar where many have fixed deals for as high as Rs. 3.09 lakh per 2.5 acre for non-irrigated land and Rs. 4.06 lakh per 2.5 acre for irrigated land with Reliance Industries Limited’, wrote the Times of India in its 31 March 2007 issue. Amidst this scenario, construction work at Reliance’s Jamnagar SEZ is steadily progressing with 65,000 workers on the job at 11,000 acres proposed SEZ site and with majority of land already acquired. This is possible only in Gujarat and Jamnagar’s people demonstrate farmers of Jamnagar shows the way for it.”
“It is pertinent to note that the whole lot of private land is acquired for Jamnagar SEZ through consent only and no government agency was involved in the process of consent; except at the stage of declaration of ‘consent award’.”
“To quote the Times of India again in order to conclude: ‘the smarter among the farmers are pumping the compensation amount into buying huge tracts of land around the new SEZ limits to cash in on future expansion of SEZ. Others have bought LCVs, dumpers, JCBs, taxis and have leased them to RIL’.”
(Note by Mr. Parimal Nathwani, Group President, Corporate Affairs, Reliance Industries Ltd., Undated)
- 7.
In 2008, it was under the 1894 Act that the land was acquired by the Reliance SEZ. In 2014, a group of 12 farmers moved the court seeking that the acquisition of their land be declared lapsed because they were still in possession of it. Reliance has now challenged the constitutional validity of section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013. The Section 24(2) of the new Act reads: ‘In case of land acquisition proceedings initiated under the Land Acquisition Act of 1894 where an award under Section 11 has been made five years or more prior to the commencement of the Act of 2013 but the physical possession of land has not been taken or the compensation has not been paid, the proceedings shall be deemed to have lapsed as being illegal, unconstitutional and ultra vires.
“It [Reliance] took over 4494 hectares but about 30 hectares of this, across two villages, remained with farmers who refused to give it up. They never took money and continued farming. Under the 2013 Act, the farmers are demanding [sic. their] right to their land.”…“These farmers’ land in Kanachhikari and Kanalus villages is right inside Reliance’s SEZ” (Bhatt with Dabhi), Indian Express, 12 January 2016 .
- 8.
It should be clarified that the 2008–09 study covered two more SEZs besides the Reliance Petrochemical Ltd. SEZ, Jamnagar, that is, Dahej (District Bharuch) and Mundra Port and SEZ (Kachchh). The process of land acquisition in two SEZs (other than the Reliance SEZ) was very different. In the case of Mundra, the Government of Gujarat had allotted the wasteland to the SEZ, while in the case of Dahej, the government acquired the agricultural land and gave it to industry.
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Appendices
Annexure 1
1.1 Advantages of Operating in an SEZ
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Simplified procedures for development, operation and maintenance of the SEZs and for setting up units and conducting business in SEZs;
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Single-window clearance for setting up an SEZ;
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Single-window clearance for setting up a unit in an SEZ;
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Single-window clearance on matters relating to Central as well as state governments;
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Simplified compliance procedures and documentation with an emphasis on self-certification.
Incentives and Facilities Offered to the SEZs
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Duty-free imports/domestic procurement of goods for development, operation and maintenance of SEZ units;
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One hundred per cent Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50 per cent for next 5 years thereafter and 50 per cent of the ploughed back export profit for next 5 years;
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Exemption from minimum alternate tax under section 115JB of the Income Tax Act;
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External commercial borrowing by SEZ units up to the US$ 500 million in a year without any maturity restriction through recognised banking channels;
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Exemption from Central Sales Tax;
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Exemption from Service Tax;
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Single-window clearance for Central and state-level approvals;
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Exemption from state sales tax and other levies as extended by the respective state governments.
The Major Incentives and Facilities Available to SEZ Developers Include
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Exemption from customs/excise duties for the development of SEZs for authorised operations approved by the Board of Approval;
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Income Tax exemption on income derived from the business of development of the SEZ in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act;
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Exemption from Central Sales Tax;
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Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act).
http://www.sezindia.nic.in/about-fi.asp
Annexure 2
1.1 Classification of SEZs
Sr. No. | Type of SEZ | Minimum area required (in Hectares) | Minimum processing area |
|---|---|---|---|
1 | Multi-product | 100 hectares to 5000 hectares (maximum) (To promote widespread development in certain states and union territories the minimum area requirement has been reduced to 200 hectares) | 50% |
2 | Multi services/sector specific | 100 hectare (To promote widespread development in certain states and union territories the minimum area requirement has been reduced to 50 hectares) | 50% |
3 | IT/ITES, gems and jewelry, bio-tech and non-conventional energy | 10 hectares with a minimum built-up area of: 1,00,000 sq. meters for IT 50,000 sq. meters for gems and jewelry 40,000 for bio-tech and non-conventional energy | 50% |
4 | Free Trade Warehousing Zone | 40 hectares with a minimum built-up area of 1,00,000 sq. meters | 50% |
Annexure 3
1.1 Fact Sheet on Special Economic Zones
Number of Formal approvals ( As on 07.09.2017 ) | 424 | ||
Number of notified SEZs ( As on 07.09.2017 ) | 354 + (7 Central Govt. + 11 State/Pvt. SEZs) | ||
Number of In-Principle Approvals ( As on 07.09.2017 ) | 31 | ||
Operational SEZs (As on 30 th June 2017 ) | 222 | ||
Units approved in SEZs (As on 30th June 2017 ) | 4643 | ||
INVESTMENT | Investment (Rs. Crore) ( As in February 2006) | Incremental Investment (Rs. Crore) | Total Investment (Rs. Crore) (As on 30 th June 2017 ) |
Central Government SEZs | 2279.20 | 13,694.80 | 15,974 |
State/Pvt. SEZs set up before 2006 | 1756.31 | 9721.69 | 11,478 |
SEZs Notified under the Act 2005 | – | 4,05,690 | 4,05,690 |
Total | 4035.51 | 4,29,106.49 | 4,33,142 |
EMPLOYMENT | Employment (No. of persons) ( As on February 2006) | Incremental (No. of persons) Employment | Total Employment (No. of persons) (As on 30 th June 2017 ) |
Central Government SEZs | 1,22,236 | 1,12,625 | 2,34,861 |
State/Pvt. SEZs set up before 2006 | 12,468 | 83,502 | 95,970 |
SEZs Notified under the Act | 0 persons | 14,48,020 | 14,48,020 |
Total | 1,34,704 | 16,44,147 | 17,78,851 |
Exports in 2006–07 Exports in 2014–15 | Rs. 34,615 Crore a Rs. 4,63,770 Crore | ||
Exports in 2015–16 | Rs. 4,67,337 Crore | ||
Exports in 2016–17 | Rs. 5,23,637 Crore | ||
Exports in 2017–18 (As on 30 th June 2017 ) | Rs. 1,35,248 Crore (Growth of 15.39% over the exports of the corresponding period of FY 2016–17) | ||
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Shah, A., Patil, A., Nandani, D. (2020). Land, Labour and Industrialisation in Rural and Urban Areas: A Case Study of Reliance SEZ in Gujarat. In: Mishra, D., Nayak, P. (eds) Land and Livelihoods in Neoliberal India. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-15-3511-6_10
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