Urban wastelands

A Hindi saying can work as a useful bit of advice to a government
trying to salvage its policy on Special Economic Zones (SEZ): 'Kill the
snake in a way so that the stick doesn't break'. There has been an
unprecedented rush to set up SEZs, after the rules allowed considerable
leeway for real estate development.

The government has cleared about 200 SEZs in less than a year compare
that with just six SEZs in China without clearly working out its
implications for the farm sector, in terms of productive opportunities
lost and livelihoods displaced.

Little wonder that there have been protests in various parts of the
country against colossal multi-product SEZs, prompting a worried,
politically astute Congress president to say that a policy review was
needed.

But she could have gone further to press for a cogent land use policy as
integral to a rapidly industrialising India. While India must rise as an
industrial and services giant, its potential to become an agriculture
superpower should not be overlooked.

With its soil and climatic conditions, India can become a California
many times over. Why let go of this opportunity, merely to encourage a
property boom? By rewarding rent-seekers rather than productive forces,
India's growth story can come unstuck.
The commerce ministry seems to have belatedly woken up to these facts to
suggest that SEZs are best put up on wastelands. While this is no ideal
solution the term wastelands is often loosely used to include even land
that is productive but lacks clear title the ministry seems to have got
its basics right.

It is not too late to make a course correction protect the
industrialising impulse behind the SEZ policy and yet cause minimum
disruption. India has wastelands of another kind, in the form of
industrial townships that have fallen into disuse.

There are numerous such tracts of semi-developed real estate scattered
all over the country, either as part of major cities like Mumbai,
Kanpur, Howrah and Allahabad, or as separate towns such as Modinagar,
Kalyani, Durgapur, Rourkela, Asansol, Ichalkaranji and Sholapur.

With an infusion of infrastructure, power in particular, these places
can come back to life, spawning new industries and perhaps even reviving
earlier ones. The government should focus on power for these regions, as
part of its infrastructure thrust.

The prime minister was keen about deepening the pensions and insurance
market to attract $50 billion per annum for infrastructure alone. If he
directs these funds to make SEZs out of old centres, he can 'kill' the
current controversy and leave everyone happier in the bargain.
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