India is reviewing its plan to establish special economic zones
after growing protests from farmers who say they are being displaced from
their lands. Anjana Pasricha takes a look at the controversy from New
parks were envisaged as havens for domestic and foreign investors. They
would offer tax breaks
world-class infrastructure in a country where everything from power to
roads is in short supply.
Hundreds of businesses immediately rushed to take advantage.
Twenty-four zones have already been established, 63 more have been
approved, and many others are in the planning stages.
But after 11 months, the policy is mired in controversy. Critics
complain that the zones are taking away agricultural land and displacing
farmers, often without paying them adequate compensation or helping them
to find a new way to make a living.
Observers say the controversy highlights the dichotomy in India, where
manufacturing and service industries are powering ahead, while 70 percent
of the population still lives in the countryside and depends on the land
for its livelihood.
The intensifying opposition both from farmers and politicians has
forced a rethink on the government's part.
Industry and Commerce Minister Kamal Nath announced recently that the
government will not approve any new projects until it gathers more
information on the impact of the existing zones.
Nath says farmers must receive justice and correct compensation
whenever the government takes over their land. He says the government is
examining the issues surrounding land and resettling or compensating
The issue came into sharp focus earlier this month after five people
were killed in violent protests against a 5,800-hectare economic zone
being established in West Bengal state. Hundreds of enraged farmers and
activists say the farmers have neither been properly compensated for their
land, nor offered any help in finding a new means of livelihood.
Farmers in the western state of Maharashtra, have also vowed not to
give up their land.
Farmers are not the only ones who are worried about the economic zones.
The Finance Ministry has expressed fears that many businesses will move to
tax-free zones, resulting in substantial revenue losses for the
But officials argue that the factories in industrial zones will provide
much-needed jobs in rural areas where millions remain unemployed or
underemployed, despite the booming national economy.
The Commerce Ministry estimates that the economic zones will attract
$13.5 billion in investment and create nearly a million jobs by 2009.
It is not a new concept. India is borrowing the idea from China, where
a small number of such zones have been used to attract investment.