SEZ-Special Economic Zones in India

Here's my 2 cents on this issue.

At the time of independence,India's share of world trade was around 2.4%.
It decreased to a level of 0.5 % in the years that came and was stagnant at this very level for 4 decades.
The main reason was the neglect of exports and the ISI(Import Substitution Industrialization)to protect their infant industries.
The Asian countries like Taiwan,South Korea succeeded in exports with their cheap products.
The going was tough for India.
But of late the govt has started taking initiatives in this direction and first EPZ(export processing zone) was set up at Kandla in 1967.Later Export Councils were also set up.

China too took steps in this direction and 6 SEZs were set up alongwithg 120 free trade zones there.
The Chinese Economy is now for everybody to see as these zones alone attract $60 Billion of investment which is 10 times that to total foreign investment in India.

India took lesson from the great Chinese success story and SEZs are also being set up here.

Advantages:

a.)Indian Govt does not have long term funds to develop industries of its own.
   Some kind of private partership is highly needed.
b.)To attract Foreign investments.
c.)Giving tax rebates is only a way to attract the investors.
d.)India has many targets to achieve--reducing poverty,creating more jobs,GDP growth of 9% or higher.
All this can be achieved and SEZs are a wonderful tool to do this.

e.)Massive industrialization can be done by this way.


Disadvantages/Issues:

a.)There is controversy on Govt's policy of acquiring farmers' land for developing SEZs.
It has resulted in the Real Estate developers getting large chunks of lands at a throw away prices.
And the farmers are agitating on not adequately compensated for their lands.
The possible solutions can be:
        a.1)Non fertile or at the max lands with one crop only should be acquired for SEZ development.
        a.2)Let the private companies approach the farmers directly and pay the market rates.Govt can act as a facilitator.
        a.3)The farmers whose lands have been taken should be given employment in the SEZs/training in the required skill sets for the same.

It should be a win-2 situation for all the parties.

b.)There is talk and comparison of India again going the imperial way.Like in the past,we had Rajas and their riyasats.
This issue if valid,Govt can have regulatory authority over the SEZ functioning.

Most of the times it is the political leaders who are against the SEZ just to generate enough propaganda and gain some political milege out of this.
People should be made aware of the benefits which they will get out of this.
But then again that needs a political will to set the things right.


In this case,I would say that the wheel has been set in motion.And this is the wheel of progress which will lead India as a power in the Global World.Let it keep rolling!!!