India’s battle over business

Many Indians are uneasy over the government’s industrial development plans.

India’s plans for Special Economic Zones have been
contentious in many communities [EPA]

A climbdown by government officials in Goa, India’s smallest state, over the allocation of land to industrial parks, has been a victory for activists, but in other parts of India, the fight continues.

Medha Patkar, a prominent Indian social activist, recently began a march from Nandigram to Mumbai to highlight, she said, “the drawbacks” of the government’s Special Economic Zones (SEZs).

The government sees its SEZ policy as using private sector funding to further India’s economic development.

But many in rural India see the policy as snatching their land and others fear it will fuel an influx of migrant workers.

Bibek Debroy, an economist and professor at a New Delhi-based think-tank, told Al Jazeera the government was going about its development policy the wrong way.

“First, I should say, I don’t believe in SEZs. We did experiment with them 15 or 20 years ago, but they didn’t work,” he said.

For Debroy, the SEZs mask the real issue – urbanisation, a sensitive subject in India, where more than half of the country is arable land.

“Fundamentally it’s about the conversion of agricultural land to land for manufacturing purposes. That transfer … is needed for economic growth, but obviously you have to have adequate compensation [first].

“There is also a lack of transparency. The entire decision-making process has been non-transparent and that has fuelled some of the objections.”

Those who object have been highly vocal about it.

Building works

The recent launch of Tata Motor’s Nano, the world’s cheapest car at only 100,000 rupees ($2,500), while greeted with horror by environmentalists, was eagerly awaited by India’s growing middle class.

Tata’s Nano was eagerly awaited, but its
unveiling was also marked by protests [AFP]

But away from the buzz over the vehicle, a factory in Singur, West Bengal, one of several where the car will be produced, was at the centre of protests. The plant expects to be operational by the end of the year despite the campaign.

In Goa, where protests last year were just as vitriolic, things paid off in the activists’ favour.

As 2007 drew to a close, Goa’s peak party season looked as though it might be threatened by the row over the government’s plans for 12 new special economic zones (SEZs), to join three already agreed upon.

Not that in the end one could tell from the traffic jams and near endless throngs of Indian and foreign revellers.

The SEZs, 15 in total, had long been unpopular with residents.

Fondu Dipka, who runs a scooter rental and taxi service for Goa’s tourists, said: “They’re spoiling Goa, selling all the land. We don’t want it. The politicians say it’s good for the local people, but we say it’s not good.”

Peak season threatened

Ahead of New Year, Matanhy Saldanha, the leader of Goa’s Movement Against SEZs (GMAS), warned tourists that planned protests could turn violent, with Siddhanath Buyo, the secretary of GMAS, was quoted as saying: “We cannot assure our agitation would be peaceful.”

The warning sparked an angry response both from those whose incomes relied on the tourists, and from the government.

In a way it [the SEZs] is good, but the thing is it doesn’t bring the good to the local people

Goa receives more than one million tourists each year, most from other parts of India.

In 2006, just over two million tourists – both foreigners and Indians – travelled to Goa, according to government figures, and officials had provisionally predicted 2.3 million people would travel to the tiny Indian state in 2007.

For years, Goans have written about their fears in local newspapers voicing concerns over falling income from tourism. Most still object to the SEZs and complain that visitor figures were down in 2007. Many rely on tourism for their income.

Goa’s peak season over New Year provides a huge cash-injection into the local economy.

One resident, Diego Fernandez, said: “Everybody here wants to make a buck. People from outside, they come here to make a buck too.”

“In a way it [the SEZs] is good, but the thing is it doesn’t bring the good to the local people. It’s only really for the outsiders who are coming in.”

Migration fears

While the SEZs appeared to be universally unpopular with locals, their concern was often over a potentially huge influx of people from other states.

Stanley DeSouza, who owns a number of tourist bungalows in North Goa, said: “What people are fighting for is that so many people from outside Goa will come to work in Goa and they will almost outnumber the Goans and we will lose our identity.

Nandigram has become a byword for conflict
over the development projects [EPA] 

“How are they going to provide them with proper infrastructure when they cannot provide basic infrastructure to us? There are people [here] who don’t have even drinking water or proper electricity. The power can go on and off at any time of the day

“If we had the Goan manpower to work in those SEZs … it’s fine, but they say we don’t have the proper qualified manpower and if you look at the salaries, what they pay Goans … the pay packets are very, very meager. People from outside Goa will come to work for that small pay packet, they don’t mind.”

Asked why he objected to the SEZs, Santos, a Goan waiter working in one of the shacks along Baga beach, said: “Out of state people coming in to settle [in] Goa -they work for anything.”

While hotels and travel agents reported some cancellations over predicted unrest, the majority ignored the warnings and in any case, by December 31, 2007, the government announced it was scrapping the scheme, an apparent victory for Saldanha and his anti-SEZ activists.

The opposition Bharatiya Janata Party (BJP), which supported Saldanha, quickly attempted to make political capital out of the climbdown, calling for an investigation into how land was allotted through the scheme.

Debate also ensued as to the government’s position on the three already agreed SEZs, covering 250 hectares of land. The site of one, allotted to Cipla’s Meditab Specialties, was stormed by locals earlier last year.

Death and disruption

Around India, the government’s plans for industrialisation have experienced similar disruptions, These protests are more often about the government’s seizure of land for the projects.

There is only merit [in the SEZs] if we first ensure there is a national rehabilitation and compensation package

Nandigram, in West Bengal, has become a byword for conflict with local government over the issue.

Official figures say 14 people were killed in a wave of violence in March last year. Some activist groups put the death toll much higher.

The government abandoned its plans for an industrial development that campaigners said would have taken up a quarter of the land from 38 villages.

Protests have also been reported in Orissa state, and in January 2008 villagers in Andhra Pradesh geared up for protests against another proposed industrial park.

But away from the villages, questions remain as to the effectiveness of SEZs.

‘Mixed feelings’

In a 2006 report on India’s economic development, the IMF questioned the government’s policy and said of SEZs overall: “International experience with tax incentives, which exist in virtually all SEZs worldwide, are mixed.”

With India’s economic growth predicted at close to nine per cent in 2008, the government will have to tackle the issue.

According to management consultancy Frost & Sullivan, which has a strong presence in India, the problem lies with those who would take advantage of a relatively sound policy.

Its research showed that SEZs started well, with many people investing, but that some elements wanted to take undue advantage.

“Land is at a huge premium,” the firm said from Mumbai, adding that some developers “are buying the land up at a throwaway price from the government, and that’s really the issue”.

“Going forward things have to take a different route.”

Professor Debroy goes further.

“There is only merit [in the SEZs] if we first ensure there is a national rehabilitation and compensation package,” he told Al Jazeera.

“We need to do that first and then push them for what they really are – forget all this hogwash about exports, India is looking to create urban clusters.”



Source: Al Jazeera


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