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CHAPTER VII
Special Economic Zone: Land Acquisition, Rural and
Environmental Implications
7.1 Introduction
Land, the basic and long lasting source for production as well as for human
inhabitation, is one of the most disputed issues in the public policies in India.
Decisions concerning land allocation and land use pattern comprise diverse array of
issues that can go beyond the considerations of economic growth. The matter of land
use is predominantly important due to large agrarian population in economies such as
India, where access to land, in absence of alternative employment-income
opportunities and social security, provide economic security and therefore is rendered
high in terms of social status (Patnaik, 2008; Bhagwati & Panagariya, 2013). Ideally,
diversion of land from agricultural to non-agricultural sectors should be preceded by a
considerable shift of workforce and local population (NCRWC, 2001; Shah et al,
2012). In the absence such provision, diversion to non-agriculture use is most likely to
invite resistance from farmers and local communities. The Land Acquisition Act
(LAA) has been used to take land without the owner‟s consent has been practiced
since the colonial rule. Growing spatial inequality with economic growth, only few
livelihood opportunities for the rural poor may aggravate the issue of land (Pasinetti,
1981).
The situation gets further stressed when the Government, being a custodian of
land, tends to play the role of a trader as it has come out from the real on ground
practices under the LAA. The enactment of Special Economic Zone Act 2005 goes a
few steps ahead by allowing the Government to transfer the land acquired for public
purpose under LAA to the private companies for development. Application of LAA to
acquire land is often go along with various kinds of pressure tactics by the corporate
and state to get consent of the land owner, as later owing the low bargaining power. It
has been observed that the process of acquisition and conversion of agricultural land
150
reflects failure of the state and the market; in fact largely both of these form a nexus to
indulge in „primitive accumulation‟ by the state (Chandrashekhar, 2006; Patnaik,
2008).
Question is being asked on procedures of acquiring the land rather than the
need of acquiring agricultural to promote industrial economic activities such as
manufacturing units and infrastructure (World Bank, 2008; Shah et al, 2012). It is also
evident from the experience that ambiguous implementation processes generally result
in diversion of large tract of land, often more fertile, than what is actually required. It
has been also observed that large part of acquired land ends up in the hands of the real
estate companies rather than intended productive sectors and infrastructure. The
absence of land use the policy and federal structure of governance where land is
primarily a state subject has been the main culprit for faulty conversion or diversion
of land from the agricultural and allied sector. The most critical issue is that of the
nexus between the state and the private sector (Patnaik, 2008).
Short term interest of politicians and builders has impeded the processes of
public discourse and consensus building. Environmental implications further enhance
the criticality of issue, diversion of land from the agricultural sector. Lack of clear
environmental policies, also provide new dimension to the debate, sadly concern are
only reflected when land is diverted out of primary sector and being threat to the
livelihood of the farmers. Establishment of unaccounted SEZs across the country has
also created threat to the environment in large. Effluent from these SEZs units has
been threatening to ecology and creating problem of water shortage and pollution.
Largely in practice SEZs Act do away from the environmental clearance
(Environmental Impact Assessment). The extreme nature of these SEZs needs to be
analysed through proper policy making.
7.2 Land Acquisition and Rehabilitation
The socio-legal issues such as land acquisition, displacement, rehabilitation
and compensation has been the complex subject to deal with. Same time real estate
development and land speculation has been the threat. As companies from other parts
of country are also looking to take advantage of SEZ incentives, re-locating of various
companies leads to consequent loss of income and rise in regional inequality. It has
been extensively reported that the farmers are protesting against the forced acquisition
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of agricultural land, with obsolete Land Acquisition Act of 1894 in the name of public
purposes. The establishment of SEZs countrywide would lead to livelihood losses for
farmers and dependent, whose land will be acquired and in reality little job creation,
use of advanced technology or network can impact negatively. Gifting the thousands
of acres of valuable land to developers in insignificant amount to conduct business by
relaxing the laws of the land, including those meant for welfare of labour,
environmental protection, taxation, etc., in the hope that it will automatically
encourage industrialization and solve the prevailing problem of unemployment and
poverty is futile (Chandrasekhar, 2006).
Figure no 7.1: SEZ Hybrid industrialisation
Source: Conceptualise by the Author, 2015
Farmers and peasants in various states such as West Bengal, Uttar Pradesh,
Maharashtra, Uttarakhand, Odhisa, Punjab and many more has opposed to the land
acquisition for setting up SEZ, it is a growing issue across the country. Water problem
due to SEZ is also a major emerging issue as it has been reported from Mundra
Economic Zone, it expects to get at least 6 Million litres per day by the Sardar Sarovar
project, and same is the case with other operational and proposed SEZ throughout the
SEZ
Capital
Incentive Long
Gestation
Period
Complex
Projects
Huge
Sunk Cost
High
Returns
Geogra-
phical Ideo-
syncrancies
Lack of
Liquidity
Intangi-
bility
In-
separability
Hetero-
geneity
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country. The other major issue is relaxation of labour laws which is applicable to the
rest of the country but shall not apply to the SEZs units. It‟s like creating state with in
state with different land of law and norms. Existing labour laws are established with
good intention to promote the welfare of workers. Relaxing labour laws only for these
economic zones reflects the lack of conviction of government towards its own
commitment to social justice.
Land is the principal source of livelihood in an agrarian economy. Over the
period the issue of land acquisition has become the most obvious medium of
acquisition and then transfer of resources from average and poor people to private
business corporations, leads to the loss of livelihood and large scale displacement of
local population. In this kind of developmental process, always the beneficiaries are
the big corporations and losers are the ordinary people and farmer community
dependent to land in several ways, the peasants and tenants, agricultural labourers,
tribal‟s and fishing community. The SEZ fast becoming and representing the most
outrageous symbol of pro-corporate, anti-people, anti- labour established as model of
industrialization (Banerjee, 2006; Nielsen, 2010; Roy, 2007 and Shah et al, 2012).
Due to inaction of government, there is growing perception that only popular and
mass resistance could make the government to re-think and to have a moderate stand.
Difference between acquisition land for setting up production industry, and land for
mining is very little, so far it is evident that due to inadequate industrial policy, land
reform and social auditing has led to destruction of livelihoods and displacement
(Banerjee, 2006; Patnaik, 2008).
Figure no 7.2: SEZ’s impact on Society
Source: Conceptualise by the Author, 2015
Gender Inequality & Poor
Labour Standard
Social Aspects Employment
Creation
Impact on Environment Women and Working
Conditions
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To understand the impact of SEZ on society and environment following figure
7.2 reflects the five different types of impact that SEZ can cause at various level and
how all these effects are interacting with each other.
According to SEZs regulations and guidelines a multi-product SEZ is needed
to have 1000 hectares while the single product SEZ can be established in as little 100
hectares of land. Thus, SEZs may incorporate a single manufacturing unit, or a cluster
of multi product industrial units. Guidelines also suggest that 35 per cent of land have
to be assigned for the industrial or processing purposes; rest of land can be used for
housing purpose, services, institutions, parks, and so on (Dept. of Commerce,
Government of India, 2015). Only units approved under the SEZ scheme are to
establish units in premises of SEZ.
Apprehensions have been expressed about the misuse of the Act for acquiring
land and relocating the existing industries into SEZs premises to take advantage of
relaxations and incentives. However, so far evidences shows that these apprehensions
are untrue to the certain extent, new investments has been made and employment
opportunities have been created in the SEZ units. The subsequent benefits of
spillovers effect, investments made, employment opportunities and acceleration of
economy in general is expected to compensate the losses of revenue on account of tax
relaxations and exemptions provided under SEZs scheme (Aggarwal, 2006; Dev,
2008). These SEZs are supposed to be new instrument of economic development.
Apprehensions from various corners have been stated regarding acquisition of
agricultural land for setting up new SEZs. Even though, there are guidelines by the
Central Government to the state governments for peaceful land acquisition process,
the first targeted land for acquisition should be of waste and barren and, if necessary,
single-crop agricultural land could be acquired for the SEZs through lawful
acquisition machinery.
Further, it has been said that only if essential than a portion of double-cropped
agricultural land can to be taken to fulfil the minimum land requirements, especially
for the setting up of multi-product SEZ, and acquired land area should not be more
than 10 per cent of the total land required for the establishment of SEZ (Department
of Commerce, GoI, 2015).
The Supreme Court of India recently ruled, “If the project taken as a whole is
an attempt in the direction of bringing in foreign exchange, generating employment
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opportunities and securing economic benefits to the state and public at large, it will
serve public purpose”. However, in a recent judgment (May 2010), the Supreme Court
of India sternly criticised the abuse of Land Acquisition Act and proposed for
development of pro-people land acquisition policy. It has clearly stated that the state
must act as a benevolent trustee of people‟s land. It directed the government to
develop laws supporting those whose land is being taken.
The displacement by the land acquisition for notified SEZs is approximately
1.14 million, which is 18 times higher than the number of people officially claimed to
get direct employment in these notified zones. The Department of Commerce (2010)
estimates suggest that 10 lacs new direct jobs and while 14 lacs persons get indirect
employment by creation of an SEZ. This estimate lead us to the conclusive numbers
as total employment created from SEZs to be just about one-eighth of the loss
signified by displacement for land acquisition. This estimate raises many questions on
objective and process of establishment of SEZs.
7.3 SEZ and Land Acquisition
Since inception SEZs has been versed with various kind of controversies
which has put question mark on SEZ Act and government policy. Land seems to most
important element of SEZs policy as it is evident by the ambiguous use of Land
Acquisition Act 1894, diversion of land for other purposes and impact on
stockholders.
7.3.1 Land Acquisition Act 1894
The aspect of land acquisition has been core to the controversies on SEZs.
Though, SEZs were not the first instances which became base of land acquisitions by
central and state governments for establishment of industries. India‟s public sector
enterprise has been acquiring land for expansion of production since independence.
The expansion venture of several central and state public units, as well as the
development of new townships (for example, Chandigarh, Bhubaneswar, Bokaro,
Bhilai, and Durgapur) based on large-scale land acquisitions and rehabilitation of
local populations. Several past and present land acquisitions have been conducted
under the umbrage of „public purpose‟ clause of the LAA of 1894.
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7.3.2 What is ‘Public Purpose’?
The Land Acquisition Act (LAA) 1894 has been criticised for long time, being
an archaic legislation. This is, nevertheless, a relatively recent criticism emerging in
response to establishment of SEZs. There is no clear explanation why the LAA 1894
was not controversial topic when India‟s public sector enterprise was on an acquiring
splurge. One clarification could be that „public purpose‟, the apparent basis of land
acquisition for government agencies is sanctified by the LAA, was never controversial
as long as the land remained with the public sector firms. The same „public purpose‟
became point of contention when land being allocated to private firms for
development of SEZs.
As state agencies acquired large tract of contiguous land under the clause of
„public purpose‟, than allocating it to private developers, the debate created a critical
question that „can states acquire land in „public purpose‟ for use of private firms‟.
The SEZ policy of government of India has two apparently irreconcilable
facets. It depends largely on the active involvement of private enterprises for
development zones. The SEZ policy empowers state governments to be „facilitators‟
in land acquisitions on behalf of developers. Implication of such expectation is based
on realisation that land markets suffer from inefficient market-based transactions due
to information asymmetry. Thus, state governments are expected to play role of
mediator between landowners and developers.
Section 4(1) of the LAA 1894 provide rights to the state (and central)
governments to identify land for acquisition and issue necessary notifications
accordingly. Any kind of objections against land acquisition can be filed under
Section 5(1) are to be heard by the district administration and the final declaration
against land acquisition is issued under section 6(1) of the LAA.
It is imperative to observe that the only aspect of this acquisition process that
can be questioned in a court of law is the amount of compensation provided for land
to the land owners. The acquisition of the land by state under clause of „public
purpose‟ of LAA cannot be questioned legally.
Part II, Section 4(1) of the LAA clearly says that “whenever it appears to the
appropriate government in context of the land in any locality (is needed or) is likely to
be needed for any public purpose (or for a company), a notification to that effect shall
be published in the Official Gazette and in two daily newspapers circulating in that
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locality of which at least one shall be in the regional language, and the Collector shall
issue public notice of the substance of such notification to be given at convenient
places in the said locality”.
The LAA defines „public purpose‟ as an extensive modus. An amendment
made in 1984 (68th amendment of 1984) prolonged the original definition to
accommodate the requirements of industrial projects of private firms. While Central
and State governments have been traditionally employing „public purpose‟ clause of
LAA to acquire land for social welfare and public sector purposes. But the utilisation
of state machinery to acquire land for SEZs has provoked the criticism that „public
purpose‟ is being misused for the benefit of private developers at the expense of actual
owner of land (Sarkar, 2007; Levien, 2011).
The inclusion of infrastructure projects in list of public purposes in 2007
amendment is understood and justifying SEZs development. On the other hand,
criticism is mainly due to the government‟s „overtly‟ proactive role in the land
acquisition process. Indeed, contentious cases of land acquisition occur when some
small number of landowner offer resistance and prevent developers from acquiring
large contiguous land (Chandrashekhar, 2006; Patnaik, 2008).
Section 23(1) of the LAA says that, compensation for acquired land is to be
determined and calculated on the basis of the market value of land as on the date of
notification for acquisition and damages sustained (if any) by the owner on various
accounts (such as damage to crops and trees or property or from shift in residential
property induced by acquisition). It disregards the fact that value of land depend upon
use of land, in case of establishment of SEZs supposed to raise the price but
landowners end up getting only small fraction of real value of land.
On the other side, Section 24 of the LAA talks about factors that affects
compensation amount to the land owner. It comprise of degree of significance cause
leading to acquisition, unwillingness from the side of land owner and appreciation due
to future use of land as well as from developments on the land. These provisions have
serious implications on determinations of final compensation amount. It has been
identified as a distinct „anti-farmer‟ bias in the process of acquisition of land and
awarding of compensation (Swaminathan, 2007). Prevailing Market price is
apparently the key for determination of compensation. But question is that how
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government and companies arrive at right market valuation in opaque land markets
and vague information?
The determination of compensation under the LAA bestows upon the
Collector or the District Commissioner. The only endorsed indicators of land
valuation are sale or purchase deeds. But in reality these deeds are rarely accurate
indicators of prevalent market prices. Stamp duty in Indian market is more than ten
per cent, making it far more expensive than those prevailing in developed western
countries just 1-2 per cent stamp duty. High stamp duties develop scope for under-
quoting of prices in land sale and purchase deeds. It would be unrealistic to expect
land records in India will be maintained in an orderly and updated manner as much as
to assume that such records contains correct data are exhaustive. Barring these miss-
quoted prices, there is no other database for prevailing land prices available with
district administrations (Sarkar, 2007; Department of Commerce, GoI, 2015). It is
evident that determination of correct market price for land remains a difficult task.
The issue of inability of the LAA in recognising the appreciated value from
„new‟ use has been incorporated by the amendment in the Land Acquisition
Amendment Bill. It specifies that while determining the market value of land for
compensation, the executive (Collector) shall consider the proposed use of land and
comparing it with the value of the land in the intended category in the same region.
Yet these provisions have failed to address the core of the issue. Even if the
Collector knows about the intended purpose, it is practically impossible to determine
ex-ante the value of the land following the given guidelines. It is given that the value
of non-agricultural land in the locality in any case will not be comparable to that in a
modern state-of-art SEZ set up by a reputed developer.
7.3.3 SEZ and Agricultural Land
State Government and Corporations ventures account for over 20893 hectares.
In these cases, the land already available with the State Governments or state
development corporations or with private companies has been used for establishment
of SEZ. The land allotted for the 352 notified SEZs where operations have since
commenced comprise approximately over 43258.42 hectares (Department of
Commerce, GoI, 2014).
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Table no 7.1: Land Allocation to SEZ as Approvals, Granted under the SEZ Act,
2005 (in Hectares) as on 21.01.2015
Source: Computed by the Author from data of Department of Commerce, GoI, 2015
Out of the total land area of 2973190 sq. km in India, total agricultural land is
of the order of 1620388 sq. km (54.5 per cent). Out of this total land area allocated to
SEZ, the share of 352 notified SEZs amounts to approximately over 432.58 sq. km
only. The formal approvals granted to 32 SEZ has also works out to be around
9981,16 hectares (Department of Commerce, GoI, 2014).
Sl
no.
States In principle approvals
granted under the SEZ
Act, 2005
Share
(%)
List of Formal Approvals
granted under the SEZ
Act, 2005
Share
(%)
1 Andhra Pradesh 477 1.76 11253 22.03
2 Chhattisgarh 29 0.11 111 0.22
3 Gujarat 7198 26.55 13812 27.04
4 Haryana 6199 22.86 840 1.64
5 Karnataka 0 0.00 2789 5.46
6 Madhya
Pradesh 2000 7.38 900 1.76
7 Maharashtra 7653 28.23 7344 14.38
8 Orissa 1620 5.97 1923 3.76
9 Puducherry 243 0.90 346 0.68
10 Rajasthan 220 0.81 442 0.87
11 Tamil Nadu 1191 4.39 5534 10.83
12 Uttar Pradesh 112 0.41 671 1.31
13 West Bengal 200 0.74 324 0.63
14 Chandigarh 0 0.00 57 0.11
15 Goa 0 0.00 367 0.72
16 Jharkhand 0 0.00 16 0.03
17 Kerala 0 0.00 1197 2.34
18 Manipur 0 0.00 10 0.02
19 Telangana 0 0.00 2700 5.29
20 Uttrakhand 0 0.00 440 0.86
21 Total 27113 100.00 51076 100.00
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Table 7.1 shows total approved and notified SEZs in across the states in India.
The Maharashtra has highest number of SEZ approvals (69) and operational (52),
followed by Telangna and Karnataka. It is visible that the less economically
developed which lacks adequate physical infrastructure has less SEZ approvals in
India. But total land allotment to the in- principal approved and formally approved
SEZ in Maharashtra and Gujarat are maximum in country with 7653 hectares and
13812 hectares respectively. It comprises of 28.23 per cent and 27.04 per cent
respectively, total land allocated for SEZ and being closely followed by Andhra
Pradesh and Haryana. The share of India‟s biggest and most populated state Uttar
Pradesh (UP) in allocation of land to in-principal approved and formally approved
SEZ has been just 0.41 per cent and 1.31 per cent respectively.
The acquisition of agricultural land for setting up SEZs is one of the most
serious and vital implications of the SEZ policy and price are paid by the poor
farmers. Findings of the Committee on State Agrarian Relations and Unfinished Task
in Land Reforms (2009) raises many questions on India‟s SEZ policy as the report
highlighted that the total area of land under SEZs is expected to be over 200,000
hectares next few years. This amount of land on current production capacity is
capable of producing more than 1 million tons of food grains. Committee also
estimated that farming communities will have to suffer from losses of around Rs. 212
crore each year in total income after acquisition of said quantity of land in the country.
This policy of land acquisition may lead India„s towards food security risk in near
future.
All these kind of act in the name of economic development raises many
questions on SEZ policy and its implementation mechanism such as; how can state
governments be permitted to violate their own land use plans for establishment of
SEZs, without inviting public interest litigation (PIL)? How can the state allow the
acquisition of prime agricultural land from farmers for industrial purposes in the name
of public purpose? Why does not the government encourages industry to develop and
establish their unit in the more than 20 per cent (680000 sq. km) of the country„s land
area that is officially declared as wasteland (Sharma, 2007; Basu, 2007). These are
very serious questions marks on India‟s special economic zones and land acquisition
policy, which needs to be addressed.
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7.3.4 SEZ and Land Acquisition Issues
Total Land Area in India is 2973190 sq. km out of which agricultural area is
54.5 per cent (1620388 sq. km) and non-agricultural area is 45.5 per cent (1352802
sq. km). Out of 45635.63 hectares of land notified in the country for SEZ purposes,
operations commenced in only 28488.49 hectares (62.42 per cent) of land. It reflects
on emergence of a trend wherein developers approached the government for land
allotment/purchase more than what they need. Approximately 491 SEZs have been
formally approved, notified SEZ are 352, in-principal approvals are 33 and operation
SEZ are 196 with 3,864 approved units which in India which covers 51,055.73
hectares of land. Total Area (including In-Principal approvals) covered by SEZs is
0.058 per cent of total land area and 0.317 per cent of agricultural land (Department of
Commerce, GoI, 2015).
India‟s adoption of the SEZ model was motivated by the achievement of
China‟s SEZs, which turned rural remote place like Shenzhen into global
manufacturing destination within two decades. But, India‟s SEZ policy is unusually
different from the Chinese SEZ model. In China, the stress was on big sites –
industrial town, whereas Indian SEZs can be established in meagre 10 hectares of
area. Lack of economies of scale, it is challenging to retrieve the costs of
establishment of standard infrastructure. Further, without a huge cluster of firms in a
given sector, the collaboration‟s arising from „clustering‟ are lost (Astarita, 2013).
More considerably, China‟s SEZs were built on land own by the state, and developed
by Chinese government agencies in expectation of rental space and facilities to private
companies; but in case of India, the policy charter relies mainly on private developers
to develop, and operate the SEZs.
Land is the most significant natural resource, upon which almost all human
activity is based since ancient time. Land continues to have enormous social,
economic and symbolic relevance, particularly in case of India where affiliation with
land is not only source of livelihood and same time emotional one too (Tantri, 2012,
Astarita, 2013). Access to land, ownership of land and its documentation are essential
to the livelihoods of the large population of India, particularly in the rural and tribal
areas. Land policy and management are serious determinants of the transactions costs
connected with access and transfer of land, both for commercial and residential
purpose. Land continues to be a major source of Government revenue and is a key
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element in implementation of wide range of government schemes. Land policies and
institutions restructuring is going to have far reaching effect on the country's
capability to sustain economic growth and development, on the degree that it will
benefits the poor.
Land acquisition refers to the process by which the government forcibly
acquires private land for a public purpose with or without the consent of the owner of
the land, valuation of land is generally lower than market price. It has been
experienced from the recent land acquisition attempt for establishment of SEZ,
process is not voluntary but forceful in nature and without any consent. The major
issue with establishment of an SEZ, it generally requires forceful land acquisition and
the eviction of its previous users and local people (Pandey & Tewari, 1996; Levien,
2011). It is blindly implemented by the states governments under the Land
Acquisition Act of 1894 for public purposes. The states in which the SEZs are to be
allocated land and have been approved are facing intense protests against the land
acquisition, from the local population particularly from the farming community. They
are accusing the Government for snatching there fertile land forcibly at very lower
price than the prevailing market prices. There has been many incident of protest in
recent year by the land owners against the forceful acquisition in the name of public
purpose.
Farmers are protesting against land acquisition because it is depriving them
from their rights, adequate compensation, lack of livelihood, rehabilitation difficulties
and other despairs. Even though there is unanimity that no development activity can
be accepted at the cost of social equity, the one going drive of the setting up of SEZs
creates different kind perception. The implementation of scheme has created several
problems and the most important aspect is the issues of rehabilitation of displaced
population. People depending on agricultural land lose their livelihood provider, the
only occupation and source of income. Further, compensation given for acquired land
is meagre in compare to the present rate. Displacement from the land leads to the
search of new job to earn livelihood. Lack of skills and limited knowledge agricultural
activities makes it difficult for them, and they end up becoming casual unskilled
labour in some industrial unit. Further, there has been many cases reported which
suggest that affected people have to struggle longer period of time even to get
promised compensation and livelihood.
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7.3.5 Inadequate Compensation and Rehabilitation
Since independence, India has adopted a policy of industrial development with
establishing large industries or industrial enclaves and various kinds of projects on
heavy engineering, dams, ports, mines and development of the road and rail network.
Each one of these industrial scheme or project has led to displacement of people in
large scale. Since India has been the first country in Asia to establish economic zone
(Kandla SEZ-1965), and many more has been till today. In most of the cases of land
Acquisition and rehabilitation process, affected population has rarely found new
employments in these SEZ while only the educated elite, which constitute only the 8
per cent of the workforce in the formal sectors, have benefited. The Land Acquisition
Act treat land as a commercial entity that is lost through acquisition and landowners
are the only one to be affected and there are no other stakeholders.
Rehabilitation policy indirectly characterise labour as homogenous in nature,
which can migrate anywhere for work. This is not the case with farmers in the
country. For farmers it is an interdependent process and affiliation is fundamental.
This displacement of local resident is very painful experience since it breaks the
family and relationship with neighbourhood that is very difficult to establish in a new
environment. The relationship may be between the farmer and labourer or the farmer
and the shopkeeper or the carpenter, and so on are being destroyed. From past
experiences of displacement and rehabilitation it is evident that the rehabilitation
process of farmers, as it is implemented, does not work. It is not the case that those
affected by the displacement did not receive any form of compensation. But the issue
is that most of them did not know how to utilise the compensation amount and they
also skills to work in modern industries. Due to lack of education, knowledge and
exposure they do not know how to spend compensation amount received wisely to
secure livelihood and better social life. Most of time compensation amounts are being
spent on drinks and luxurious consumption.
Other aspect is that, it is not only land owners or farmers lose their livelihood,
eviction also lead to lose of livelihood for the landless people whom are not going to
receive any compensation and those performing non-farm activities like the
carpenters, potters, dairy work and so on, whom are generally integrated into the
agricultural economy, are left without compensation for the loss of livelihood. In fact,
most affected stakeholders due to displacement will be the farmers and labourers, the
163
small shopkeepers and service providers. Disturbing part is that legally these landless
people do not even have a basis for compensation and neither government policy
provides any kind of support.
Another significant criticism of forced land acquisition is that it often
discriminates against the most marginalised sections of affected area, particularly
people belongs to scheduled castes and tribal community. These poor people are also
victim of malpractice and corruption in the distribution of compensation amount and
other rehabilitation benefits. In recognition of the loopholes and inadequacy of the
measures, the Rehabilitation and Resettlement Bill, 2007 has been proposed by
Government of India for better rehabilitation process (Desai, 2011).
SEZs and land acquisition are interlinked, to set up SEZs, there is requirement
of large amount of land. Since the Indian government started promoting SEZ, it led to
drive for land acquisition across the country. As per Indian SEZ policy, a special
economic zone means an area of land that has been demarcated and is treated as a
foreign territory for various purposes such as trade, tariffs and duties. These economic
enclaves enjoy exemptions and concessions from various kinds of income tax, service
tax, sales tax, and customs duties and also from the prevailing labour legislation. The
government of India has made several policies changes and restructuring to promote
SEZs in the country. The Indian government is encouraging the establishment of SEZs
in the country in anticipation of economic growth and employment generation.
Table 7.2: Minimum Land Area Requirement for SEZs
Classes of SEZ Area in Hectare
Multi Product SEZ 1000
Multi Product SEZ for Services 100
SEZ in North Eastern Region 100
SEZ in Jammu & Kashmir, Goa and UTs 100
SEZ for Specific Sector or Port or Airport 100
SEZ for Electronic Hardware/Software, IT 10
SEZ for Bio-Technology, non-conventional energy, Gems & Jewellery 10
SEZ for Specific Sector in NER 50
SEZ for Specific Sector in HP, Uttarakhand, J&K, Goa and UTs 50
Free Trade and Warehousing Zone 40
Source: Department of Commerce, GoI, 2014
India's SEZ policy (2015) says that for establishment of multi-product
manufacturing SEZ, it should have at least 1000 hectares or more of land and for the
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multi-product service SEZ; it requires at least 100 hectares or more of land. India has
more than 491 multi product and single product SEZ spread all over the country,
resultant land acquisition on a large scale is taking place so that more and more SEZs
can be established.
SEZs and Land Acquisition as a policy being implemented primarily by
acquiring land, it has been observed that governments are also acquiring the large
chunk of agricultural land from the farmers. Across India, the total amount of land
acquired to accommodate SEZ goes up to 150,000 hectares, large part of acquired
land has capacity of producing more than 1 million tons of agricultural food grain
(Ghatak and Dilip, 2011). The several benefits of SEZs and land acquisition has
attracted substantial amounts of foreign currency into the country, created jobs
opportunities, also helped to bring in knowledge, technologically advancement into
the country.
The most significant adverse impact of SEZs policy has been the large amount
of land acquisition led displacement. Ministry of Rural Development, GoI (2010), has
estimated that land acquisition will lead to displacement of more than 10 lakh people,
whom are directly or indirectly associated with farming and related activities. SEZs
driven land acquisition has affected livelihood security of local population and same
time several forceful attempt of land acquisition has resulted in to dissent, outcry, and
protest from the farmers and local population.
Recently there was attempt for land acquisition in Atchutapuram (Andhra
Pradesh), forced the farmers to protest against the establishment of SEZ, as the
compensation amount offered was much lower than the market price in real estate
sector.
Nandigram (West Bengal) witnessed the violent protest against land
acquisition for the establishment of SEZ. The West Bengal state government's tried to
acquire huge piece of land amounting up to 10,000 acres (4,000 hectares) for setting
up SEZ (chemical hub and industrialization) to be developed by the Salim
Group from Indonesia. The Nandigram protest was a violent incident, where the state
government forcefully attempted to take over land. Local farmers and resident were
resolute, they did not want to give away their land for obvious reasons, they protested
against it. Police forcefully entered the Nandigram region and agitated protest led to
police firing and at least 14 villagers died and more than 70 more injured. Following
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the violent protest from villagers against the land acquisition, plan to set up SEZ was
scrapped.
There was another protest in West Bengal against the land acquisition for the
proposed Nano car factory of Tata Motors at Singur. Protest at Singur attracted global
media attention since Tata Motors started construction of a factory to manufacture
$2,500 car, at Singur. The West Bengal government used the controversial legislation
of 1894 land acquisition act to adamant takeover of 997 acres of agricultural land to
facilitate Tata to build its factory. The Act is meant for public purpose projects but it
was meant for private company with commercial purpose. Establishment of the Nano
car project was opposed through violent protest by activists and opposition parties in
West Bengal (ILO, 2011).
There was another protest in western part of India as on November 2006,
farmers from the Jamnagar District (Gujarat) moved first the High Court of Gujarat,
and later on to the Supreme Court to counter the establishment of a 4000 hectare SEZ
by Reliance Industries. Farmers claimed that the acquisition of large tracts of
agricultural land was contrary to the public interest and violated the Land Acquisition
Act. This incident forced the government to consider placing a ceiling on the
maximum land area that could be acquired for multi-product zones and to slow down
the rate of SEZs approval. Despite that, the Reliance SEZ in Janmagar kept on
growing and expanding its oil refinery plants in the area (Astarita, 2013).
Displacement has been invariably without proper rehabilitation process in
India. West Bengal is not only state which has mismanaged the politics of SEZs as it
is evident. Maharashtra, Gujarat and Goa in western India and Orissa in the eastern
region have found themselves involved in such dispute. In most cases related to land
acquisition, the state government has acted coldly in dealing with land owners
(farmers) whose land was being acquired.
Land acquisition Act, 1894, a law enacted during the British rule, is still being
used for acquiring not only land and houses, but also the livelihood of peoples is
being taken away for meagre amount of cash.
In many cases it has been witnessed that state is offering incentives by means
of land at discount rate, concessional electricity and relief from water tariffs have
been offered.
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The Indian states have a dire track record at Resettlement and Rehabilitation
process for people affected by the land acquisition (Desai, 2011; Expert Group-
Planning Commission, 2014; Ghatak and Dilip 2011). Even though Supreme Court
and state‟s High courts have also mandated and directed that government authorities
take specific measures to compensate people affected by these projects but
implementation has been appalling. It is not surprising that people are against land
acquisition, as they have witnessed the failure of government to provide adequate
compensation with appropriate resettlement and rehabilitation in the past. For local
resident and farmers, land has symbolic as well as economic value.
Playing the role of political brokerage by some state government, needs to be
devising in a way to be proactive, vigilant and reformative for fulfilling the promises
of general welfare. State government need to apply context-sensitive approaches to
compensating appropriately to the affected population. All action of the state
government should incorporate transparency, accountability and citizen-friendly
mechanisms, if they are to be credible and trustworthy. One reason why even
apparently attractive offers of compensation are declined by affected people is the
lack of credibility and responses (Sarkar, 2007; Shah, Nandani and Joshi, 2012). State
government should create institutions for better implementation and coordination
between government and citizens.
It is an open question whether SEZs will develop into islands of docile
modernity amongst a bundles of undefined dysfunctional mechanism, which
symbolize the beset India‟s democratic experiment, or whether SEZs can create new
and responsible model of governance that the rest of Indian economic and industrial
establishment will emulate to create quality democratic processes which symbolises
modernity and inclusiveness.
The land acquisition mechanism under the SEZ scheme has been contentious
in nature across the country. Resultant, most of the approved SEZs never came
became operational. It was also suspected that some of the SEZ acquired more land
than needed, while some tried to divert the acquired land for SEZ to some other
profitable commercial uses. Due to many inadequacies and controversies,
the Commerce Ministry, as reported, is also not keen to continue the SEZ scheme as it
desires to encourage the National Manufacturing and Investment Zones (NMIZ)
policy, under the National Manufacturing Policy. The Parliamentary Standing
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Committees on Commerce and Finance have been reported to opposing the new SEZ
policy as it has led to several scams and unwanted controversies.
7.4 SEZ and Land Utilisation Pattern
Land appeared to be the utmost decisive and attractive element of the scheme.
In total 45635.63 hectares of land notified in the country for SEZ oriented activities,
operations started in only 28488.49 hectares (62.42 per cent) of acquired land.
Furthermore, it can be observed that a pattern in which developers approached the
government for allotment/purchase/acquisition of unjustifiable exceeding amount of
land in the name of establishing a SEZ.
Table no 7.3: Selected State-wise Notified/Utilized/Vacant in Processing Area of
Special Economic Zones in India (As on 03.12.2014)
(In Hectares)
Sl.
No. States/UT
Total Area
Notified
Total Area
Utilized
Area Lying Vacant in
Processing Area
1 Andhra Pradesh 11203.52 4493.96 2229.89
2 Chandigarh 58.46 23.62 34.84
3 Chhattisgarh 101.28 22.04 79.24
4 Goa 249.48 0.00 249.48
5 Gujarat 12501.74 6818.59 4902.11
6 Haryana 415.49 36.57 293.69
7 Jharkhand 16.42 0.00 16.42
8 Karnataka 2296.07 841.83 1039.12
9 Kerala 961.16 390.38 455.99
10 Madhya Pradesh 1581.89 209.93 757.72
11 Maharashtra 6712.15 1754.51 3235.06
12 Manipur 10.85 0.00 10.85
13 Nagaland 340.00 0.00 340.00
14 Odisha 491.08 300.06 191.01
15 Punjab 46.12 8.39 30.92
16 Rajasthan 773.30 136.78 636.51
17 Tamil Nadu 5288.00 2223.00 2805.03
18 Telangana 2048.96 1957.22 469.51
19 Uttar Pradesh 753.92 219.20 476.77
20 West Bengal 235.84 190.71 45.13
India 46085.55 19626.64 18299.29
Source: Computed by the Author from data of Ministry of Commerce, GoI,2015
It has been observed that only a portion of the acquired land being utilised for
development and SEZ, later on denotification was also resorted within a few years for
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remaining land to profit from price appreciation. In case of diversion of land other
commercial use, it has been estimated that 5402.22 hectares (14 per cent) out of
39245.56 hectares of land notified in the six major states was denotified and diverted
for other commercial purposes (not related to SEZ) (CAG, 2014). A large amount of
lands was acquired in the name of the „public purpose‟ clause of Land Acquisition Act
1894 but eventually used for profit oriented commercial activities. Therefore, it is
evident that land acquired is not meeting the core objectives of the SEZ policy.
Land and its development is state subject, but acquisition of land is on the
Concurrent List (Government of India, 2015). SEZ Act 2005 says that, land for setting
up SEZs, needs to be acquired and the developer to have irrevocable privileges over
the land. Land is acquired and being allocated by the State Government directly or
through agencies such as Land banks depending upon the proposals made by the
Developers. Acquisition of land is based on vide section 4 read with Section 6 of Land
Acquisition Act 1894 legislation. In past and also in recent times, the issue of land
acquisition for SEZs has faced gradual increase in instances of widespread protest
across the country. Huge amount of tracts has been acquired in the process of
industrial development and establishment of SEZs across the country. The
government acquiring the land from the public is emerging as major issue and transfer
of wealth of land from the rural population to the corporate firms (motivated only by
profit) raises question on SEZ policy and its necessity.
Table 7.4 reflects on the present scenario of land area notified and land lying
unused with in the premises of Central Government owned SEZs across India. It says
that 21310.03 hectares of land out of 47803.77 notified land lying vacant all over the
India and it represent up to 44.57 per cent of land. It also suggests that Kandla Special
Economic Zone (12889.99) and Vishakhapatnam Special Economic Zone (12168.68)
are top two SEZ in terms of notified land area and same time they have highest
number vacant land area in terms of 5172.89 and 4425.854 respectively. On the other
hand in terms of percentage of land utilised and unutilised these two SEZ perform
better than the rest of government owned SEZs in India.
It is also evident from the table 7.4 that in most of government owned SEZ
more than 50 per cent of land is lying vacant. Falta Special Economic Zone and
SEEPZ Special Economic Zone are performing poorly, it suggest that unused land in
both SEZ is 61.22 and 65.27 per cent respectively. It is clearly visible that there is vast
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gap between land utilised (55.43) and land unutilised (44.57) with in premises of
SEZs units across India. It raises some serious questions on land acquisitions policy
and direction these SEZ are heading for.
Table no 7.4: Zone wise Notified Land Area Details
Zone wise Notified Land Area Details (as on 23.01.2014)
(Area in Hectares)
(in %)
Sl.
No
Name of the
Zone
No. of
Notified SEZ's
Area
Total
Notified
Utilized
Total
Area
Area lying
Vacant in
Processing Area
Area lying
Vacant in
Processing Area
1
Cochin Special
Economic Zone
65 3192.49 1298.04 1534.00
48.05
2 Madras Special Economic Zone
58 5380.42 2202.64 2738.562
50.89
3 Noida Special
Economic Zone
82 4671.53 671.50 1288.083
27.57
4 Vishakhapatnam Special Economic
Zone
80 12168.68 4172.01 4425.854
36.37
5 Kandla Special Economic Zone
33 12889.99 6880.26 5172.89
40.13
6 Falta Special
Economic Zone
20 1264.64 571.13 774.25
61.22
7 SEEPZ Special Economic Zone
70 8236.02 1893.48 5376.40
65.27
Total 408 47803.77 17689.06 21310.03 44.57
Source: Department of Commerce, GoI, 2014
Issues and concern have already been raised on loss of revenue and the
adverse impact on agriculture production. An Expert Group Report (2014) of the
Planning Commission had questioned the benefits of SEZs policy. Further, to attain
more transparency, efficiency and monitoring of process of land acquisition, allotment
and denotification of land, a detailed study from independent organisation needs to be
conducted.
7.4.1 Underutilisation of Land in SEZs
More than 53,000 acre or around 215 square kilometres of land is lying vacant
in Special Economic Zones across the country, even though industry is complaining in
respect of land acquisitions. It has been reported that, land remains vacant also due to
cancellation of setting up economic zones due to their inability to acquire necessary
amount of land. Cancellation of SEZ also takes place due to change in policy of the
government as it was noticed in the case of proposed SEZ in Punjab by the Reliance
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Industries. According to available data maximum amount of vacant land in SEZs is in
Maharashtra, followed closely by Gujarat.
According to observation from CAG report (2014) on extent of land being
actually used in the selected operational SEZs suggested that the processing area
earmarked for SEZs has not been able to utilise the allotted land for the intended
purpose in 18 SEZs involving an area of 4185.19 hectares across eight states. These
SEZs has been only utilising about 16.29 per cent of the land alloted for the industrial
processing activities as against the norm of 50 per cent. Though many of them were
notified in 2006/2007 (except Adani Ports in Gujarat) the percentage of utilisation of
land has been appalling.
Table no 7.5: Underutilised Land in Processing Area of SEZ in Major States
(hactres)
State Processing area underutilised Processing area underutilised
(%)
Andhra Pradesh 2823.55 89.23
Chandigarh 27.00 87.10
Gujarat 5639.09 87.11
Maharashtra 98.52 30.70
Odisha 21.24 30.70
Rajasthan 23.38 52.88
Karnataka 319.79 71.70
Tamil Nadu 9372.52 81.01
Total 18325.09 83.71
Source: Computed by the researcher, 2015 on the basis of data from CAG Audit report, 2014
There is major 17 SEZ, which were notified as early as between 2006 to 2008
comprises unused land up to 18325.09 hactres (83.71 per cent) of total processing area
earmarked. In case of controversial Adani Ports with notified (2009) area of 6472.86
hactres, only 833.77 hactres of land was operational and remaining of 5639.09 hactres
(87.11 per cent) still remain unused. It has also been observed that some activities of
the units in SEZs were not related to the sector specific, as and when land was allotted
to them. There is provision in the SEZ Rules regarding termination of lease agreement
in case of expiry or cancellation of lease agreement. Further, there is lease agreement
of land with 99 years in most of cases and resultantly even though land is unused,
firms are keeping the land in the anticipation price appreciation future. Thus, the units
in SEZ are not willing to vacate the land even though agreement has been cancelled.
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It is also the fact that sometimes land in SEZs remain vacant due to non-setting up of
Unit, it has been observed earlier. Investment in SEZs depends on many factors like
change of government policies, market conditions, on-going global recession, industry
specific reasons, domestic factors etc.
Since the enactment of SEZ Act 2005, till January 2015 there is 491 formal
approvals given to proposed SEZs covering 60374.76 hectares of land, only 392 SEZs
covering 45635.63 hectares have been notified so far. It has been observed that out of
392 notified zones, only 152 have are working at their functional capacity (28488.49
hectares). The land allocated to the rest of 339 SEZs (31886.27 hectares) has been
laying unused (52.81 per cent of total approved SEZs). More than 54 cases the
approvals and notifications date back to 2006 reflects on situation. It is being
observed that 30 SEZs (1858.17 hectares) out of the total 392 notified SEZs, are
located in states such as Gujarat, Maharashtra, Andhra Pradesh and Odisha. The
developers of SEZ have not even commenced the dinvestments in the proposed
projects and the land had been lying idle in their custody for more than 2 to 10 years.
Figure no 7.3: SEZ Land Lying in Across the Country in Some Major States
Source: Concetualised by the Researcher,2015
It has been observed that even after a lapse of notification by several years,
developers has not been able to implement the proposed project on lands acquired by
invoking Land Acquisition Act under the clause of „public interest‟. Further,
considering that agricultural land was acquired in many cases in the midst of protest
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and huge amount of controversies but yet persistence trend of the acquiring vast tracts
of land without any real economic activity is matter of serious social and economic
concern, demanding a cautious approach towards policy of acquisition and allocation
agricultural land for industrial purposes.
As per the Government of India, central government does not allocate any land
to SEZs, only state governments are authorised to acquire land through their Industrial
Development Corporations or other means. In most of cases large part of land is
acquired by the private developers themselves. Depending upon recommendation
made by state government, the Department of Commerce (GoI), conduct verification
of ownership and continuity of the land, then permission to the SEZ is given.
Department of Commerce (GoI) also says that before denotification of any SEZ
across the country, clearance from the state government is essential.
7.4.2 Diversion of SEZ land
It has been observed that Special Economic Zones (SEZs) policy has resultant
in to large scale diversion of land acquired for establishment of manufacturing
facilities and creating employment but evidences reflects that land is being diverted
for real estate projects for greater profit. As earlier mentioned that a trend is advent
that developers approach for allotment of vast areas of land to set up SEZ, but only a
fraction of the land notified for SEZ based activities and later on denotification is
resorted to within a few years to gain from price appreciation of land.
One of the most controversial issues of SEZs, the substantial involvement of
commercial real estate developers such as DLF, Ansal, Raheja, Parsvnath and
Unitech. It has creation of perceived notion that SEZs could be turning in to
speculative instruments for opaque urban real estate market. It is evident that
substantive engagement of leading real estate developers in building SEZs across the
country. There are some regional real state players (for example, Maytas Properties,
Suzlon Infrastructure, Emaar MGF, Videocon Realty Infrastructure and many more)
whom are active in a particular area or respective state (Basu, 2007). SEZs have been
the attractive opportunities for real estate developers for development of commercial
ultra-modern urban facilities and taking the advantage of substantial concessions.
Land area for Special Economic Zones are divided into „processing‟ and „non-
processing‟ categories. Non-processing areas can house residential, hotels, offices,
recreational centres and other commercial facilities. The permitted commercial
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activities make SEZs ideal development options with strong profitable prospects for
private companies.
Due to growing public criticism and concern for SEZs rather than being
manufacturing hub becoming a real estate hub, has compelled the government to
reduce some the concession and incentives. It includes reduction in non-processing
area to a maximum of 50 per cent of the total zone area from the earlier ceiling of 65
per cent. Additionally, it was also specified that vacant non-processing land could not
be leased to any entity other than co-developers (Department of Commerce, GoI,
2015).
But for the establishment of SEZs require contiguous land free of
impediments, which is not easily available in general. A number of real estate
companies have land banks with capacities for developing the diverse array of
facilities envisaged in zones which provide them competitive advantages over other
firms in developing SEZs. Removing such practices and monopoly would not be
possible until the land markets are unlocked, making the supply of land a
determination of the market and the government invests in development of initial
infrastructure of economic zones.
Land Acquisition Act 1894 imparts rights to state governments to acquire land
under „public purpose‟. To understand the gravity of the situation, it has been also
observed with respect to SEZs in major state such as Andhra Pradesh and Gujarat,
only 6241.03 hectares of land being actually notified (55.09 per cent) out of the total
allocated land of 11328.12 hectares to establish SEZs and related units. The allocated
land to SEZs has been was acquired over the years by using the government
machinery under the “public purpose” clause of LAA. Rest of land, 5087.12 hectares
was allocated to their private Domestic Tariff Area (DTA) firms or kept with the
developer. Therefore, massive 44.91 per cent of the total acquired land of 11328.15
hectares is not being utilised for the economic activities. It has been also noted that
out of the total notified land, large chunk of 1667.66 hectares of land were later
denotified by the developers leading to the overall non utilisation of land for intended
purpose of SEZs development amount to 59.62 per cent.
To control the on-going diversion of acquired land a committee of ministers
(EGoM-Empowered Group of Ministers), stressed on the need of limiting the use of
„Land Acquisition Act to acquire land for promotion of private SEZs and suggested
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that the LAA would no longer be used for making land transfers to private SEZs. But
the effectiveness of this instruction has been questioned due to widespread diversion
of land from SEZ related activities to non SEZ related activities in mass scale.
In the Development Plan 2031 of Government of India, 4570 hectares of land
earmarked for SEZ which includes 1458.03 acres of land acquired from farmers for
development and later on converted for residential/commercial use, but there were no
more takers for SEZs.
It has been observed that, SEZs are being converted into industrial area as well
as residential colonies. Policies such as incentivised the developers to utilize the land
for other purposes: the state governments removed the limit of the maximum height of
the buildings in case of Group Housing Colonies and Commercial Colonies for which
the licences were issued. After this notification, developers were allowed to construct
any number of multi storeys buildings in the land earmarked for SEZ. Resultantly,
developers engaged in Real Estate were benefitted. Since land is a State subject, State
Governments are free to frame any law/rule on the subject.
It is clear case of establishment of SEZ with purpose of acquiring substantial
amount of land to gain profit from the appreciated land price and utilising the land for
real estate development and other commercial purposes rather than producing export
oriented products to create jobs and contribute to the economy.
7.4.3 Denotification of Land
For establishment of SEZ a considerable amount of land is required, such land
is generally acquired through state machinery under the “public purpose” clause of
Land Acquisition Act for setting up of SEZs. After being notified as SEZs by
Government of India, few developers consequently opt for de notification from the
SEZ scheme. Though SEZ Rules 2006 restricts the developer firm from selling any
land within the SEZs, there is no restriction on usage of denotified land. This
encourages the developers to denotify SEZ land and either keep it in their possession
or sell it in the absence of any preventive policy.
According to the SEZ scheme in place, a developer who is not interested in
continuing trade under SEZ is left only option of denotification of part or full area of
land by applying with an undertaking that firm will pay back the concessions availed
on account of various exemption/concessions given by Central and State
Governments. Except this, there are no other binding instructions attached to it. It is a
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general perception that following the denotification of a project, the valuation of land
in and around the project site increases either instantly or in due course of time, as the
project progresses, depending on the nature of the project. As it is already visible that,
most of the SEZs in the India are IT and ITES based and they are situated by in large
in the urban agglomeration, and therefore appreciation of these lands is inevitable. In
this background, owing to lack of a preventive provision in the Act to discourage
denotifications, developer firms route to denotification of the entire or part of SEZ
land allocated to them for setting up unit, and in several cases it has been found that
they are diverted for commercial usage.
Table no 7.6: Details on Denotification of Land
State Number of
Notified SEZs
Area (ha)
Notified
Number of SEZs
Denotified (partial/full)
Area (ha)
Denotified
% of Area
(SEZs)
Denotified
Partial Full
Andhra Pradesh 78 13291.40 12 7 2102.08 15.81 (24.35)
Maharashtra 66 9280.76 00 19 1856.21 20 (28.78)
Karnataka 40 2416.81 3 1 61.95 2.56 (10)
Gujarat 32 13432.19 2 4 1209.51 9.00 (18.75)
Odisha 5 635.70 0 2 152.35 23.97 (40)
West Bengal 9 188.70 0 2 20.12 10.66 (22.22)
Total 230 39245.56 17 35 5402.22 13.76 (22.61)
Source: Department of Commerce, GoI, 2014
It is evident from the table 7.6 that out of 230 notified SEZs in Maharashtra,
Andhra Pradesh, Karnataka, West Bengal, Gujarat and Odisha, 52 were denotified
involving 5402.22 hectares of land from total of 39245.56 hectares of notified land. It
was observed that 35 SEZ out of 52 SEZ denotified, 100 per cent land got denotified
by developer, putting serious question mark over the reasoning behind determining
the area of land acquired and subsequent application for denotification.
The table 7.6 also illustrates state wise denotification data which indicate that
52 (23 per cent) out of 230 notified SEZs, were denotified either partially or in full
involving 5402 hectares of land. It is evident that though Andhra Pradesh possess the
highest number of notified SEZs (78) in the country, the state also has distinction in
being home to 19 denotifications i.e., partial and in full scale. As mentioned earlier
that even though SEZ land cannot be sold by the Developers, but denotification and in
the absence of restrictive provision, and on-going competition between the states lead
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to formation of certain condition which allow companies to be able to sale or lease out
the land with much higher value. Selling or leasing out will further leads to other
commercial activities rather than the prescribed economical activities.
In view of the vast extent of land that had been denotified without any
economic activity for many years, the big question arises that whether these land
would ever be returned to the original owners. Central government suggest that it is
up to state government to define rules and conditions on use of land after a developer
exit from the SEZ Scheme by denotifying the SEZ land. Without proper control on
diversion of land through denotification to gain profit, it is difficult to attain the
desired results and it is also defeating the core objective of the SEZ scheme.
7.5 Implications of SEZ on Rural India
Many rural areas are undergoing a process of “de-agrarianization”, with
younger rural workers moving out of agriculture because of lack of jobs, low incomes,
agro-climatic constraints and most significant one is forced industrialisation. The
movement of rural people out of agriculture in order to find jobs in industrial sector is
a major ingredient of the developmental process especially in developing economies.
Migration from agricultural sector to industrial set up does provide a good benchmark
for the factors that can determine the success of industrialisation. However, few
empirical studies have established the fact that success of industrialisation depends on
impact of migration on rural households and the quality of migrant‟s employment. In
theory, if migration is successful after several decades of migration one should be able
to observe a declining gap in welfare between rural and urban areas. However, as
shown in the World Bank‟s World Development Report (2008), this is not the case,
and India remains among the countries with a very high rural–urban divide. Migration
opens up more opportunities for the rural population to get into more productive
employment opportunities.
SEZs have emerged as one of the most relevant topic in the recent times with
diverse dimensions. Issues related to the SEZ has aggravated to all important
dimensions ranging from environmental, land acquisition, economic, political, socio-
legal issues and to many more. These challenging issues are relevant to the entire
nation in general. The setting up of SEZs requires substantial amount of land across
the region. Consequently, providing the land for setting up of SEZs may take away the
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large amount of agricultural land for industrial purposes. It can be said, fixed assets
created by the companies with SEZ in the environment of undefined and unrestricted
guidelines.
Even with prevailing constraints, it can be maintained that the acceleration of
economic growth in general, and the urbanization of the rural areas in particular
provide multiple livelihood strategies. These, in turn provide an opportunity cost
making agriculture an economically unviable source of livelihood with risk attached
to it.
7.5.1 Impact of SEZ on the Agriculture
Today countries are striving towards socio-economic development, SEZ is
new instrument to achieve it. A Special Economic Zone is a geographical region
which has economic laws that are more liberal than a country‟s general economic
laws. It is a specifically delineated duty-free enclave treated as a foreign territory for
the purpose of industrial, service and trade operations, with exemption from customs
duties and a more liberal regime in respect of foreign investment and other
transactions.
To set up large number of SEZs across India, there is need for amount land to
be acquired. The land area of India is 29,73,190 sq. km out of which 16,20,388 sq. km
area is used for agriculture (agricultural land). The share of the agricultural area in the
total area is 54.5 per cent and the non-agricultural area in India is 13,52,802 sq. km
(Ministry of Agriculture, GoI, 2014). The total area for proposed SEZs (formally
approved and in principle approved) is approximately 2061 sq. km which would not
be more than 0.069 per cent of the total land area and not more than 0.12 per cent of
the total agricultural land in India (Department of Commerce GoI, 2015).
If SEZs are set up on non-agricultural land, especially on barren land, then
they play an important role for the social and economic development of the country.
They can generate employment, enhance export and attract foreign direct investment
(FDI) and technology at low social cost. In case of China SEZs are set up on non-
agricultural land. Therefore they have played an important role for the economic
development of the country. It is well supported by the fact that during 1980 to 1995,
the annual rate of economic growth of China was near about 10 per cent (Astarita,
2013).
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On the other hand, if SEZs are set up on agricultural land, it may not be
appropriate for the social and economic development. If fertile land is used for the
establishment of SEZs, then the area under agriculture will decline. This will lead to
decrease in the production of agriculture. India at present is facing a food problem
(ex. on-going import of wheat) and this problem will become more severe if the area
under agriculture declines.
Setting up SEZ on agricultural land has emerged as major issue. States such as
Punjab, Haryana, UP, West Bengal, Maharashtra and some other witnessing the
protest and resistance against SEZs are being set up on fertile agricultural land. For
example, the land in West Bengal is basically good for agriculture but sake of
economic growth Government is allowing SEZs take place and leading to the protest
in Nandigram and Singur. Those were SEZs has been established on fertile land,
witnessed adversely affected the agricultural production. The social cost of setting up
SEZs is more than the benefits.
7.5.2 Livelihood Implications: Converting Farmer into Labour
SEZs are noted for their ability to create new employment opportunity. India
being the country with a labour surplus, consequently employment creation is a policy
priority. SEZs have a dualistic employment generation effect. SEZs create direct
employment for individuals employed in units operating within the SEZ. It also create
indirect employment for individuals engaged in industries and services which support
the activity within SEZs, such as trucking of goods to SEZs and many more. In all,
SEZs have generated substantial employment and are predicted to continue generating
employment in increasing volumes.
India may suffer huge socio-economic loss due to SEZ policy, which has been
ignored. An estimates of Ministry of Rural Development (2010), reveals that close to
114,000 farming households (each household on an average comprising five
members) and an additional 82,000 farm worker families who are dependent upon
these farms for their livelihoods, will be displaced due to establishment of SEZ in
India. In other words, at least 10 lakh people who primarily depend upon agriculture
for their survival will face eviction. Experts calculate that the total loss of income to
the farming and the farm worker families is at least Rs. 212 crores a year. This does
not include other income lost (for instance of artisans) due to the demise of local rural
economies.
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The government promises „humane‟ displacement followed by relief and
rehabilitation. However, the historical practices does not offer much hope on this
count: an estimated 40 million people (of which nearly 40 per cent are scheduled
tribes and 25 per cent scheduled castes) have lost their land since 1950 on account of
displacement due to large development projects. At least 75 per cent of them still
await rehabilitation. Almost 80 per cent of the agricultural population owns only
about 17 per cent of the total agriculture land, making them near landless farmers
(Desai, 2011). Far more families and communities depend on a piece of land
(agricultural labour, for work, grazing) than those who simply own it. However,
compensation is being discussed only for those who hold titles to land. No
compensation has been planned for those who do not own the land but highly depend
on the land for their livelihood.
A survey conducted by the National Sample Survey Organisation (2003)
reveals that nearly 40 per cent of the farmer households disliked farming and wanted
to give up the profession due to its unprofitable nature. These farmers largely belong
to the small and marginal category (84 per cent of the farmer households belong to
this group), which are characterised by extremely low levels of income and mainly
undertake subsistence cultivation. Moreover, with rising costs of cultivation, low
remunerations, high risks with crop failure occurring frequently, declining agricultural
growth, and mounting debts have led the farmer to a distress-like situation of the kind
mentioned earlier.
As SEZ has been established in either in outer part of cities or interiors of
states, which attract mostly, displace local population, agricultural labour and farmers
as prospective manpower, it leads to the creation of few jobs but largely destroy more
number of livelihood opportunities. Individual opt for SEZ related employment not
because there is better earning opportunity but main reason has been economic
unviability of farming and lack better options.
On the brighter side, if the farmers invest their compensation money in a
proper way, invest the money on the education of children and creation of alternative
livelihood. The agriculture labourers are being hired in SEZs largely as a casual
labour. The wage rate is generally higher in SEZs as compared to the agricultural
sector. So it may leads to improvements in their socio-economic conditions. Thus
SEZs can play an important role for the transformation of labour from the agricultural
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sector to the industrial sector. Then the burden of the population on the agriculture
sector will decline and this will be beneficial for both, agriculture and industry. It will
also lead to elimination of disguised unemployment in the rural areas with proper
utilisation of manpower.
However in reality, land generates much more complex security (livelihood)
and lifestyles. Besides the main crop, land provides certain foods, environmental
services, wild fodder, and medicinal plants. These factors are entirely dependent on
the land. Communities involve artisans; pastoral communities will also be at loss. In
fact the ones worst affected will be the share-croppers and labourers, the petty traders
and service providers. These landless people do not even have a legal basis for
compensation. The rehabilitation package offers one job per displaced family, and that
also requires the member to have a certain basic educational qualification. There
higher probability that affected population engaging in self-employed activities due to
lack of skills and education, it also explain their lower participation SEZ workers.
Based on the accounts of locals, contractors are primarily used by the
companies to pass on responsibility, and take no legal binding on the employment of
casual labour. The contracting of work to contractors also allows companies to be
flexible on the staffing, as one villager noted „hiring and firing if and whenever they
want is easier‟.
According to a study conducted by Society for Participatory Research in Asia
(PRIA) in 2008 on the conditions of workers in economic zones reveals that only few
workers have long-term employment contracts. Short-term contracts are used for
flexible hiring and firing and for avoiding costs such as maternity and redundancy
pay. Further, there is no regard for the impact of SEZs on local livelihoods, the
opinion is not positive as it has been argued that the SEZs will eventually lead to
distress migration of locals. Therefore, the communities such as fisher folks, farmers,
landless labourers, women other marginalised will remain untouched by all new
employment opportunities arising out of the SEZs.
It is important, therefore, that, in addition to suitable financial compensation,
the displaced farm labour and allied workers are given preference in employment by
the SEZ developer. There should be a provision for their subsequent absorption in
employment in the SEZ establishment and in the processing units. They should get a
preferential treatment. Each SEZ proposal must include a plan for rehabilitation of the
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workers who would be displaced from their traditional employment. A proper
implementation of that plan with specific required condition to secure affected
population to formed and approved, proper supervision the implementation of the
rehabilitation plan must be executed.
Given arguments does raise several questions such as, are the SEZs in the
interest of the farmers, agricultural and non-agricultural communities who are living
off the land? Is the Land acquired in the name of “compelling and overriding national
interest” is really for the masses? Actually, in the name of „development‟ we are only
creating disparities with wealth in a fewer hands and nowhere near making growth
„inclusive‟ which would be based on the concepts of sustainability, ecological
sensitivity and an ingrained understanding of the cultural roots of a people. Besides
farm size distribution, tenure systems and changing farm types, developments in
terms of diversification and pluriactivity, i.e. labour allocation changes, are attributed
to the phenomenon of structural change. The effective direction is not always
unambiguous: labour markets determine structural change and vice versa. Labour
allocation decisions are driven by economic incentives such as wage differentials, but
non-economic motives may also play a decisive role.
Inclination towards SEZ related employment opportunities, not due to better
employment opportunity but due to less productivity of farm activities. The impact of
SEZ on rural employment can be considered as negative in the sense that it may
generate a labour shortage and deprive rural areas of the youngest and best educated
people. The impacts, whether positive or negative, vary greatly and depend on a
number of factors and variables, which policy makers and development practitioners
need to address. SEZ is hiding behind myths of „trickle-down effect‟23
for growth to
give itself license to strengthen the hand of corporate elites, thereby contributing at
once to accelerated growth for the already enriched and growing poverty for the
impoverished. It is thus contributing to rapidly rising economic inequality. Goals can
only be realised with SEZs, when policy is aligned, proposals are based on hard
economic criteria and the government tries to partner with the local community rather
than forcing against their will.
23 Trickle-down economics, is the theory that providing economic benefits to those with upper-level
incomes will ultimately benefit society as a whole, through the extra wealth being invested into the
economy and therefore creating jobs that provide wealth for lower-income earners (with that wealth in
turn being spent back into the economy).
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7.6 Special Economic Zone: Environmental Implications
Generally the environmental dimensions of SEZs are less deliberated, because
the position of political parties is a disdainful towards environment. There is not much
information available on the impacts of the Special Economic Zones on environment
in and around these zones. Broadly, SEZ has three kinds of impacts that can have
adverse effects on environment. First it may create problem of water shortage, as
diversion of water for SEZ use is very substantial. Second impact would be the impact
of release of intoxicated effluents from the SEZ units. It is evident from the pollution
created by the SEZs in locations like Ankleshwar in Gujarat and Patancheru in Andhra
Pradesh, scores among other locations as illustration. SEZs release of untreated
effluents from the economic zones has polluted and affected the local populations.
Thirdly, land allocated to SEZ could mean destruction of groundwater recharge
systems. It must be noted that in India, right to extract groundwater is connected with
the ownership of land. Hence SEZs even in relatively small area can pump out and
consume huge quantity of water, resultant drying up the wells of the surrounding area.
The SEZ Act 2005 has not mentioned much about environment protection,
there is no requirement of environmental clearance as it has been assumed that units
in zone will be non-polluting entity and all the authority regarding environment
protection and clearance has been vested on Development officer of SEZ. It has not
mention anything regarding sources of water for the proposed economic zones, leave
aside the question of environment restrictions or impact assessment. The SEZ Act
prescribed orders or notifications to states across India has given freeway to the water
requirement and practices. For example, the Gujarat SEZ Act says, “The SEZ
developer will be granted approval for development of water supply and distribution
system to ensure the provision of adequate water supply for SEZ units”. Similar
situation is there officially or unofficially in other states.
7.6.1 SEZ and Environmental Degradation
Right to Life comprises Right to live in a pollution free environment. To
protect the environment, there have been provisions such environmental checks,
clearance and more to reduce the harmful effects of industrlisation. However,
surprisingly the SEZ units are exempted from environmental impact analysis. The
Development Commissioner of SEZ can give environmental clearance without taking
in to account and consulting the pollution control board. Generally SEZ units have
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been permitted to follow their own methods to maintain environmental standards, but
it is evident that pollution control or environment protection is the least among the
priorities of these profit oriented firms.
The SEZ Act says that to set up a multi-product SEZ, a minimum of 1,000
hectares of land is required. Traditionally these lands would have been under multiple
uses and could be source of livelihood. They could be agricultural land, agro
biodiversity farmlands, residential villages, mangrove belts, wetland and even forest
patches. Each of these has an important ecological role in sustaining healthy
environment in addition to being an inherent link with people‟s livelihoods source.
Thus, when these lands convert in to SEZs, the ecological mechanism and human
existence are bound to be affected.
The Supreme Court definition on right to housing, shelter and livelihood as
part of the all-encircling Right to Life under Article 21 in the landmark case of Olga
Tellis vs. Bombay Municipal Corporation, local people are protesting against the
projects, on the grounds of loss to livelihood. It will lead to decrease in agricultural
lands, costal area and ecological declination (Basu, 2007).
The large scale land acquisitions involved in SEZ development have had grave
consequences on the livelihoods and food security of marginalised and vulnerable
section in India. SEZs scheme, due to their high consumption of land, have developed
as the threat to the livelihoods of farmers and violation of human rights.
It is discriminating and unjust that the SEZ developers are required to be
provided more than 1,000 hectares of land, even though most of time large portion of
land remain unutilised. This is an absolute violation of constitution of the country. It
disrespects several clauses of Land Reform Acts, Parliament‟s decisions and Supreme
Court Judgments regarding the land acquistion. Since environmental audit and public
hearing may not be compulsory for these firms under the Act, the affected people are
not allowed to raise their voice or opinion about the land acquisition mechanism and
the on-going projects harmful effects.
There is a general consensus that environmental laws should be amended like
SEZs and applied in rest of the country for industries. It is mainly due to the
apprehension about the time consumed in various environmental approval processes
which may slow down the indusralisation. Thus the “Right to development” should be
achieved so as to balance approach towards the development and environment for the
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needs of present and future generations. It was also evident from the case in
Banwasiseva ashram v. State of U.P. & Essar Oil, Halar Utkarsh Simiyi, the
environment must be protected in such a way that appropriate balance between the
economic development and sustainable development can be achieved (Banerjee,
2006).
The SEZ Act 2005 suggests that firms do not require Environmental Impact
Assessment (EIA) as process of the application for the establishment of new units.
This is because SEZs scheme approve only “non-polluting” industries and facilities to
be established inside the premises of SEZ. The enterprises do not need any public
hearing where affected communities can interact with the enterprises, raise issues and
share their concern. Scheme empowers DC with enormous power for granting
environmental clearance for SEZ units. Firms located inside the SEZs premises able
to avoid the State Pollution Control Boards as they work directly under the
government control. There is no provision of filing any petition if the people are
adversely affected. Further, the state governments have also formed complementary
conditions for SEZs in coastal areas by formulating new Coastal Regulation Zone Act.
7.6.2 Impact of SEZs on Environment- Global Experiences
The environmental degradation experiences of the Mexican maquiladora EPZs
are probably the most controversial and cited example. As manufacturing facility in
maquiladora did not comprise of waste treatment infrastructure and facilities, air and
solid waste pollution, which became a health hazard for local populations. This was
compounded by fragile monitoring and enforcement system of environmental
authorities and a perception that environmental laws could be ignored because of their
“priority sector” status. Alarm has been raised several occasions due to adverse
environmental effects of EPZ effluents in Sri Lanka, the Dominican Republic, and
EPZ units in Mauritius (Willmore, 1995). While assessing environmental impacts,
however, a distinction needs to be drawn between several single unit SEZ programs,
and industrial park-style zones. It is difficult for authorities to adequately enforce
environmental standards for economic zone as they are situated across the country, as
it has been observed through Mexican experience. It has been observed that industrial
park-style zones, and modern private zones have a much better environmental
protection record due to planned waste treatment facility, zone-specific environmental
mechanism, and effective management system.
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According to Chen (1993) Shenzhen SEZ has been instrumental for China‟s
economic growth; on the other hand she hasn‟t taken into consideration of
displacement cost, cost of loss of livelihood of the fisher folk and environmental cost
due to establishment of SEZ‟s. Consideration of the negative externalities of SEZs
may have given different conclusion. It was reported that Shenzhen SEZ, located near
the Pearl Riverestuary, suffered negatively due to its manufacturing activities. The
nuclear power plant, chemical based units inside the SEZ has affected the Pearl River
estuary in adverse way and violated environmental protection law. There exists an
inverse U shaped relationship between the per capita GDP for Guangzhou SEZ and
waste water emission. It is evident that the success of Chinese SEZs has come with a
dreadful cost to the environment. Indian Government has been walking on the same,
ignoring the fact that the economic success of the SEZs in China has come with a
huge cost on environment.
7.6.3 Impact of SEZs on Environment- Indian Experiences
Experience in India has been not that different with SEZs, the ecological
balance has been adversely affecting the environment across India. SEZs developed in
coastal region has been polluting the environment and disrupting the ecology since
many years as these are built in sensitive coastal ecosystems and the construction of
SEZs in these sensitive regions violates the Coastal Regulation Zone (CRZ), 1991. As
per the Coastal Management Zone (CMZ) notification in year 2008, does not allow
construction in coastal region, which violates the basic rights of the local community
(Centre for Environment and Development, 2009). The adverse impact of Mudra port
SEZ in Kutch on mangrove plantation destruction is visible at the site. The
disappearing mangroves of the Mundra play very vital role in balancing the coastal
eco-systems and soil preservation of this area (Asher, 2008). The area which Mundra
SEZ covers houses more then 5,79,000 trees and more than 23 species of migratory
birds. It also has drastic impact directly and indirectly on the livelihood of more than
1,000 fishing families as they depend on common wastelands to generate livelihood.
Even in the case of establishment of the POSCO (Pohang Iron and Steel
Company) SEZ in Orissa may impact the environment adversely. The Gahirmatha
Marine Sanctuary in nearby area to the POSCO location will also be immensely
affected. The SEZ will eventually destroy the system of natural creeks, waterways and
food chain. It will also have adverse effects on livelihood as cultivation of „pan‟ may
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reduce drastically. Furthermore there is another case of Polepally SEZ, where local
villagers are badly affected by water pollution due to untreated effluent of SEZ
(Rawat et. al. 2011).
7.6.4 Use of Water
The heavy consumption of water by SEZ is one of the major problems.
Ministry of Commerce (GoI) says that SEZ around Sardar Sarovar project is expected
to consume at least 6 Million litres of water per day from the dam project.
The major concern emerged with the development of SEZs is the demand and
consumption of extra water that will stress the already strained and contested water
resources. The gravity of situation can be understood with reference of two examples,
first one is the POSCO SEZ in Odisha, were the water requirement is 286 Million
litres per day. This requisite water will be acquired from Jobra barrage on Mahanadi
River in Cuttack district and ultimately from the upstream Hirakud dam. There is
already on-going protest against diversion and reservation of water from Hirakud dam
for industrial purpose. There was another case of Mangalore SEZ in Karnataka on
water issue. Impact Assessment Committee (2006) estimated that SEZ has been
consuming water up to 136 Million litres per day. This is in spite of the fact that
Mangalore city is facing water shortage problem even without establishment of the
SEZ, it has led water situation to the critical stage (Rawat et. al. 2011).
7.6.5 Posing Threats to Water & Air Security
The SEZ, which is emerging as concern to the agricultural community, there is
threat that most of SEZs will be requiring many thousand acres of agricultural land
and huge amount of water which can harm local people and disturb ecological set up.
Establishment of SEZ may result into a threat to the water security for the areas where
SEZs are to be developed and would certainly have an impact on the national
agricultural sector where the acquisition of land for SEZ would mean reduction
agricultural production and damaging the groundwater recharge mechanism.
Industrial production and unchecked exploitation of natural resources time and
again results in the generation of huge amounts of air and water-borne pollutants.
They are releasing their toxicities bi-products and wastes that will pollute the water
bodies in turn and affect the environment adversely. Thus it will lead up to two-fold
disaster in the area, resulting to conflicts between the economic zones and the local
population. The effect of all these activities could lead to critical situation.
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Table no 7.7: Industrial Impact on the Society
Industrial Impact Societal Change (Gender,
Livelihood, Poverty)
Food and Agriculture
Less yield from crops - Reduced calories intake for
women
Increases food prices
Less milk/nutrition for children
Higher food insecurity for women
Water
Reduction in water availability
More dependence on unsafe water
Impacts on mother and child
nutrition
Health
Water borne diseases - Increase of diseases like
dengue. Vulnerable, Malaria, etc
Respiratory diseases due to Indoor - Disease
sensitivity
Air pollution and other emissions
Infant mortality
Source: Adopted from P. Arunachalam, 2008
Apart from the problem of water pollution, SEZs units are also the cause of
pollution in the form of emission of toxic gas and particulate matters that adversely
affects air quality, causes serious harm to human health as well as the local ecology.
Toxic air pollutants can cause several kinds of health problems such as cancer,
respiratory, cardiovascular and neurological diseases. Toxic gases in form of carbon
monoxide when inhaled, affects harmfully bloodstream, reduces the availability of
oxygen and can be extremely damaging to local residents health in general. Emission
of gas mixture such as nitrogen-dioxide affects normal functioning of vital organs
lungs, respiratory system and increases the risk of respiratory related health issues.
Most of emission in form of particulates is related with health hazards such as
emergence of respiratory complications, skin irritations, eyes inflammations, blood
clotting and several kinds of allergies.
7.6.6 Toxic Pollutants
Pollutants released from industry including pesticides, heavy metals, cyanides
and many more can be extracted into air, water or in solid wastes. There is very little
information on characteristics or precise resources of these chemical ingredients and
toxic residuals, since almost no government agency, industries and other stakeholder
do any sampling or research on toxic pollutants of the region. Industries in general
consume more than 37 per cent of the world‟s energy and emit 50 per cent of world‟s
toxic chemicals, which are detrimental to the human health and environment in large.
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Inorganic acids and chemical mixtures share large portion of dangerous waste
extract. This industrial waste is exclusively created and extracted by laboratory
activities. These dangerous extract are generated during production of industrial
products and chemical mechanism, it also has impact on consumption and
optimization of the system, air and forests, natural resources and degradation of
environment at large.
This chapter is based on the premises of implication of SEZ on land
acquisition, environmental and rural India. It has been observed that clause of Public
Purposes in LAA legislation being used for land acquisition for private companies. It
is evident that thousands of hectares of land lysing vacant across the country and it
raises question on demand of vast amount of land by corporate. Land being used for
non-SEZ related activities, land has been diverted for other purposes; loan has been
raised against the SEZ by developer. Land has somehow become the most attractive
component for companies to be part of SEZ scheme. It is clearly visible that objective
of SEZs scheme has lost somewhere and it has become a government instrument for
land acquisition for private firms. This chapter also talks about environmental and
rural livelihood implication of SEZs across the country. If SEZ need to be beneficial
to nation, there is requirement of a comprehensive policy on SEZ, an optimal use of
resources, and leakages needs to be plugged in terms of misuse of allocated land and
negative impact on environment. The government needs to ensure that only large
scale manufacturing are allowed in SEZs, regional disparities and potentially located
away from the cities in dry-lands so that rural areas may benefit from the industrial
development. After several protests over acquisition of agricultural land, there is need
of understanding and adequate rehabilitation and compensation to farmers. The
development of SEZs may end up destroying employment in rural areas by making
farmers landless and dependent population. SEZ may create very little employment
for highly skilled and net employment may have negative result with farmers being
converted in to casual labour.