Although there are dissenting voices, most States are able to go ahead with the establishment of special economic zones, or SEZ. It is only in Kerala and West Bengal, where the Communist Party of India (Marxist) is in power, that it has become a major topic of discussion. The media conveys the impression that the debate is centred on whether or not SEZ is in accordance with Marxist principles. The credit for transforming the free trade zones, which were failing worldwide, into special economic zones and making a success of them belongs to the regime in China, which still swears by Marx and Mao. How, then, can SEZ be termed anti-Marxist?
West Bengal and Kerala have SEZs even now. According to information published by the Government of India, of the 250 SEZs notified so far 16 are in these States: eight in Kerala and eight in West Bengal. Of the 513 SEZs that have been given formal approval by the Centre, 16 are in Kerala and 23 in West Bengal. Of the 138 given approval in principle, 13 are in Bengal and one in Kerala. This means that even if the State government rejects all the applications now pending with it, Kerala will have 17 more SEZs and West Bengal 36. Clearly the debates going on in the two States have no ideological basis. The question before us is not whether we must go in for SEZs but whether we must go in for more of them.
There have been reports that the Chief Minister had withheld a score of SEZ applications recommended by the Industries Minister and that the CPI-M has directed that all of them be forwarded to the Centre. When the Chief Minister placed the proposal before the Cabinet, the CPI ministers asked that the matter be held over until their party finalized its policy. In the meantime, the Chief Minister said that some SEZ applicants are real estate businessmen. When media persons asked the Industries Minister about it, he said this had not come to his attention. The Health Minister gave a similar reply when she was asked about reports that her son was connected with a fraud case that is taking up a lot of media space these days. She said she was not aware of it. Why ministers are unaware of what is going in their homes and unable to notice who has filed the applications coming before them is a fit subject for inquiry. The party which picked them for the job, the Chief Minister who heads the ministry and civil society institutions interested in a clean administration all have the duty to look into the matter. To borrow an expression used by a senior minister in the context of some unacceptable court rulings, whether the problem is the thickness of the bundle of currency notes needs to be examined. (The minister was hauled up before the court for that remark. But the question whether it amounted to contempt of court still remains undecided.)
All the SEZs notified in Kerala so far are under the government or institutions controlled by it. That may be the reason why there have not been objections to them. Three of them are for IT and IT enabled services. Of the rest, three were applied for by the Kerala Industrial Infrastructure Development Corporation (Kinfra) and two by the Cochin Port Trust. That three applicants who have received formal approval are real estate companies is evident from their very names. Two of them are establishing SEZs for the IT/ITES sector and the third for biotechnology.
The Kerala economic scene was dominated for long by manufacturers and distributors of consumer goods. As inflow of money from outside the State increased, sale of luxury goods outstripped that of traditional consumer items. Now builders have become kings of the market, pushing aside jewellers, fashion wear retailers and automobile dealers. The big real estate companies of the country entered the State only recently. In a short period, their activities have pushed up the prices of land and homes beyond the reach of a majority of the people. This is the time for the government to take firm decisions on land use, keeping this fact also in view. There is only one reason for the government’s unwillingness to take policy decisions in this regard. It wants to retain the right to take decisions on each application as it likes.
Some CPI-M leaders have raised the strange argument that they are allowing SEZs not because they like them but because the Centre has provided for them. This is a palpable attempt to place the blame for their own sin on someone else. The Central law does not compel States to set up SEZs. Each State has the freedom to allow or not allow SEZs taking into account their own circumstances. Recently the Goa government decided to abandon the SEZs that were sanctioned because of strong opposition from the people.
The situation in Kerala is different from that in West Bengal. Bengal had many industries. As bandhs and gheraos grew, many industries migrated to other States. No new industries came up. The Bengal government is ready to acquire 10,000 acres of farm land for a foreign company to build a petrochemical complex because it is eager to end three decades of economic stagnation. Kerala is not in such a desperate situation. Our circumstances allow us to take decisions wisely.
Only 512 hectares of land is needed for all the eight SEZs notified here so far. Of this, 400 hectares are for two projects of the Cochin Port Trust. Only 10 or 12 hectares of land is needed for each of four projects. It may well be possible to sanction more projects of such small size. But do we need real estate companies as intermediaries for that? We are now witnessing the sad sight of Kinfra, which has a mandate to build industrial infrastructure, reducing itself to the role of middle men in land deals.
The rulers justify the concessions they give to investors, saying they will go elsewhere if their demands are not met. The agreement which the Left Democratic Front government negotiated with the Dubai Internet City authorities shows that we can get good terms if we handle things intelligently recognising our strengths and weaknesses.
Before sending the pending SEZ applications to the Centre, the government must take the people into confidence. It must publicize complete information about the applications and give the public an opportunity to raise objections, if any. This is necessary to dispel the doubts that have arisen about the SEZ enthusiasts in the administration.
Based on column “Nerkkazhcha” appearing in Kerala Kaumudi dated September 11, 2008