Who SEZ what

 
Better would be an informed debate

The Global Competitiveness Report identifying institutional maturity as India’s medium-term advantage over China is a good context in which to analyse the gathering controversy over special economic zones (SEZs) and the related but broader issue of land acquisition and farming as an occupation. Because India is a robust democracy, major public policy attracts vigorous, sometimes vitriolic, debate. China lacks that and will perhaps reap one day what it has sowed by making policy through diktat. Would that India’s political debate over economics were more informed, though. The Congress in Bengal has joined Mamata Banerjee in agitating against efforts to secure land for industry. Farmers in Punjab have started protesting. The commerce ministry has issued a long list of do’s and don’ts . The Left wants a ceiling on SEZ land to ensure “food security”. Raghuvansh Prasad, the rural development minister, has called SEZs a “scam”. Some basic issues are being forgotten.

First, SEZs need to be regulated as everything else but the whole idea about fast-tracking the creation of world-class infrastructure will be defeated if an inspector raj is also created. The commerce ministry saying only barren land should be acquired for SEZs assumes that every agricultural plot is of vital importance to this country. This is plainly wrong and it leads to the second misconception. Farming, as our columnist today explains while looking at farmers’ suicides, is a risky business. There are far too many agriculturists in this country and India can’t hope to buck history and develop by holding urbanisation/ industrialisation at bay. SEZs are one of the many solutions we need to speed up urbanisation, create new jobs and take people out of farming. So it benefits no one if politicians keep on saying SEZs won’t affect farmers.

Third, the issue of “proper” compensation comes up because there isn’t a proper market for land in most areas SEZs are being proposed. Auctions, as we have argued, is one solution. Another is to encourage land-owners to form commercial collectives. Fourth, to argue SEZs will threaten food security is absurd. Then what about encouraging manufacturing on a huge scale, which will require more land? Lastly, Indian politicians should wonder whether they will end up being more disruptive than the Taliban. While they agonise over SEZs, Bush, Musharraf and Karzai are planning to use a variant of the idea to create economic dynamism in the troubled Afghan-Pak border.
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