The thought of doing a book on SEZs was nowhere in our scheme of things till about a year ago. We were merely following the twists and turns in the SEZ story like most others. By end 2006, however, SEZs ceased to remain academic controversies. As SEZ-related developments became murkier, the debate assumed larger sociopolitical dimensions. Slowly it turned emotional and propagandist. Finally, the story took a fatal turn with violent clashes over SEZs leading to loss of property and lives.

We were shocked by the ugly turn of events. We were also taken aback by the amount of hype being fed into the debate by both its supporters and opponents. In practically all forums, particularly the popular media, SEZs were portrayed as either angels or demons. Somehow, somewhere, the debate on SEZs has compromised heavily on logic and sanity. We also feel that the hysteria and emotion surrounding the debate has been used by some sections for implementing narrow divisive agendas.

As SEZs continued to create ripples and grab headlines, we got increasingly disillusioned by the quality of the debate. Indeed, the rampant rabble-rousing was not only diluting the intellectual content of the discourse, but was also doing grave injustice to the common man by imparting distorted impressions. This is what provoked us into writing this book. We felt it important to examine popular perceptions on SEZs, as thrown up by the ongoing debate, in a dispassionate, factual manner.

Zoning Development

The Indian economy is doing well and seems to have broken away from the 6.5 per cent growth trajectory of the 1990s to a 9 per cent growth trajectory, although one can continue to debate whether this is structural or cyclical. This isn't about growth alone, but also about its trickle-down effects. The National Sample Survey (NSS) data for 2004–5 shows a drop in poverty ratios, though not as much as one had originally hoped. Education indicators (gross enrollment in elementary schools) have gone up. Even health indicators show some improvement. This is the India Shining story. But there continue to be concerns about whether these improvements are broad-based enough and whether segments of society are deprived and disadvantaged and are being marginalized in the growth process. This is the concern in the divides and disparities section of the Approach Paper to the 11th Five Year Plan (2007–12). Divides and disparities can be interpreted in different senses, individual or collective, gender, caste, religion and even geography. The geographic identification is usually expressed in terms of a rural/urban dichotomy, but is a bit of an over-simplification. There are States (Bihar, Jharkhand, Uttar Pradesh, Uttarakhand, Madhya Pradesh, Chhattisgarh, Orissa, not to forget the North- East) that aren't doing particularly well. 200 of 600 districts are backward. 125,000 of 600,000 villages have no physical or social infrastructure worth the name.

A reader of this book would have by now noticed the critical differences between the international development of the SEZs and the way they have evolved in India. We have already touched on this aspect in the first two chapters.

The second concerns the SEZs as a business model for corporate India. Related to that is the topic of how the stakes involved in the SEZ business for developers compares with that of the units which set up shop in those zones.

In this chapter, we will try to give a synoptic view to these subjects. We have mentioned earlier that these zones are by far the most ambitious of all the economic models that India has experimented with so far. They have the potential, if handled well, to alter the contours of the Indian economy fundamentally in the next 10–15 years.

The SEZs as a Business Model

What sort of a business model are the SEZs for India? An examination of the available literature shows that there are no models to emulate for this business in India. As the previous chapters have shown, the Indian plan has been pretty unique, with no precedence to rely upon.

There are, therefore, three aspects with respect to which one can try to understand the business of the SEZs. The first concerns the question of economic viability of the zone. This is a tricky issue. For various reasons, the SEZ business in India has become identified with the real estate businesses.

Project Details

Total Area : 2000 Hectares (20,234,300 sq. meters)

Processing Area : 500 Hectares (5,058,570 sq. meters)

Non-Processing Area : 1500 Hectares (15,175,711 sq. meters)

Processing Area: 700 Hectares

Textile: 25%

IT/ITES: 10%

Auto: 20%

Food Processing: 10%

Biotech: 15%

Gems & Jewelry: 5%

Others: 15%

Non-Processing Area: 1300 Hectares

Residential: 50% Sports & Rec.: 5%

Commercial: 25% Education: 3%

Hospitality: 10% Health: 2%

Other: 5%

Modes of Investment

As a Equity holder.

By Leasing of Land.

By a Collaboration Agreement.

As a Co-developer.

Secured Loans

Existing SPV can issue shares in lieu of current valuation to any person.

Land owner to be allotted proportionate share in SPV.

Equity holder can be given exit clause, by selling his share to SPV.

Revenue out of SEZ operation to be shared in terms of holding in SPV.

As an Equity Holder

Raheja can acquire land from owners by way of lease agreement for minimum period of 20 years. At any point of time lease or possession can be encashed for an agreed consideration. Consideration can be in the form of portion of built-up area. Lease can be with individuals, association of persons, company or a society or any other legal body being a conglomeration of land holders.

SEZ, What is That?

It is a curious fact that till the countryside erupted over the SEZ question in 2006, the Indian Parliament had not even once discussed the subject. It had only figured as questions in both houses of Parliament. The tenor of the questions too was only about whether or how many projects had got the approvals necessary in order to begin operations. None of those queries had anything to say about land.

As we have said before, SEZ was made operational by the Exim policy of 2000. Finance minister Yashwant Sinha, in his budget speech for the year 2000–2001, stated the general policy. But SEZ did not figure either in the general discussion on budget or thereafter in any of the two houses of Parliament.

Industry too, after making the usual round of platitudes, more or less forgot the offer. There was a good reason for the forgetfulness.

SEZ, as conceptualized by the BJP party led National Democratic Alliance, was a scheme. Industry captains knew pretty well that schemes could be and were often reversed as soon as the regime changed at the centre. That did not mean that industrialists did not use those schemes or policies to make hay. The centre doles out subsidies to public sector oil marketing companies for the losses they suffer for having to sell kerosene and cooking gas at far less than their cost prices.

• Public purpose re-defined to include: strategic purposes vital to the state; public infrastructure, such as electricity, communication, mining, water supply, public facilities;

• Public purposes also includes cases of ‘persons’ (person includes any company or association or body of individuals, whether incorporated or not)–where land required for purposes useful for the general public and restricted to cases where at least 70% of total land already purchased;

• Part VII dealing with acquisition for companies omitted;

• Land remaining unutilised for 5 years to revert to appropriate government;

• 80% of the difference in consideration received over the acquisition cost to be shared amongst land owners in proportion to value of land acquired in case of transfer;

• Rate of compensation to be not less than floor price fixed by state government or average of higher prices paid in 50% of land sale cases during the last three years, whichever is higher;

• Conversion of land acquired to intended category of use to be taken into account in fixing market value;

• Full payment of compensation before taking possession;

• Entire exercise of land acquisition made time bound at every stage;

• Persons having tenancy rights included in the definition of ‘person interested’;

• Jurisdiction of civil courts barred; Land acquisition compensation disputes settlement authority proposed in each state, and also one for the centre;

• Solatium increased from 30% to 60% of market value; 75% for cases of urgency.

The rush for SEZs started after the announcement of the SEZ rules on 10 February 2006. There was no inkling of this dash when the late Mr Murasoli Maran, India's former Commerce Minister, announced the SEZ policy in April 2000. Thereafter too, there was hardly any haste among developers to build these zones even when the Exim Policy for 2002–7 increased the fiscal benefits for SEZ units, or when the Foreign Trade Policy for 2004–9 emphasized their importance. Commenting on SEZs, an editorial in the Economic and Political Weekly (EPW) of 5 April 2003 mentioned: ‘The plan to set up SEZs was announced in 2000, in a bid to emulate China's spectacular success in boosting exports from its special economic zones. However, the implementation of the SEZ project has so far not been conspicuously successful. As Jaitley himself acknowledges, most of the projects are still bogged down, mainly by delays in land acquisition’.

Since 10 February 2006, the Board of Approval (BoA), which is empowered to approve SEZs, has met 13 times till 5 June 2007. On each occasion, it has examined proposals forwarded by different state governments, as well as those submitted to it directly by developers. Over the last one year, as SEZs slowly started moving into the eye of the storm, popular attention began zeroing in on the regional distribution of these zones.

09/07/2007

Sir,

As per discussions held with you, I am forwarding herewith the desired information relating to Singur project, for your ready reference and future course of action.

With warm regards

Yours faithfully

Sd/

Additional District Magistrate (G)

Hooghly

Encl: As stated above

The WBIDC as requiring body has submitted 13 (thirteen) proposals to the Collector Hooghly for acquisition of lands for ‘TATA Small Car Project’ at Singur. After scrutiny and examination the Collector, Hooghly started 13 LA cases comprising 5 mouzas viz., Beraberi, Singharbheri, Khaserbheri, Bajemelia and Gopal nagar under Singur Police Station having total area 997.11 acres.

1. 1) Individual notices for each plot of lands could not be issued. In the initial stage, serving of individual notices were made for a few cases. Afterward, due to mass agitation and gave law and order problem individual serving of notices could not be continued.

2. However general notices in the local panchayats, important government offices and other conspicuous places were published. Publication of notices were also made through local and Kolkata based English and Bengali newspapers and also through loudspeakers.

3. The price of land was arrived at as per GO No. 1705-LA-3M-07/06 dated kolkata the 6 June 2006.

4. Exact price for the land parcel that the district administration acquired from 13 no. of LA cases is Rs 119.5266 crore.

5. The requiring body WBIDC submitted proposal from 13 LA cases and after scrutiny Govt of West Bengal given administration approval for each case. Afterward, due to mass agitation and gave law and order problem individual serving of notices could not be continued.

6. […]

How do developers go about the task of setting up SEZs? Before looking at the process, it will probably be wiser to understand what a ‘developer’ implies in SEZ parlance. According to Section 2 of the SEZ Act of 2005, a ‘developer’ is a person, or a State Government, holding an approval letter from the Central Government for establishing an SEZ. A particular SEZ might have more than one developer if one single entity is not found possessing the minimum stretch of contiguous land required for building the zone. All such entities then become ‘co-developers’.

A simple way of understanding the rules of the game to be followed by developers would be to look at the details that they need to submit to the authorities for building zones. Compared with the general perception, the paperwork involved is not excessively long or tedious. The form ‘A’ in which an applicant is required to apply for setting up zones is just a three-page document with a refreshingly simple attitude. This has been reproduced in Annexure 1. Apart from the mandatory but somewhat perfunctory information on the developer (name, address, nature of the company, etc.), an interesting query in the form is the distance of the proposed zone from the nearest sea, road, air or railhead. One can sense that the authorities are keen to understand the kind of links the zone can grow given the gateways around it.

TO BE ANSWERED ON 22.08.2003 FUNCTIONING OF SEZS

435. AVSM BRIG (retd) KAM AKHYA PRASAD SINGH DEO PARSURAM MAJHI

Will the Minister of Commerce and industry be pleased to state:-

1. (a) The details of proposals for setting up special economic zones in respect of which approval has been given by the union government the basis of proposals received from different state governments\promoters, state wise and location wise;

2. (b) The date on which approval has been given to each proposal, state wise;

3. (c) The reasons for non-functioning of special economic zones particularly at Paradeep and at Gopalpur in Orissa;

4. (d) The date by which these special economic zones are likely to become functional; and

5. (e) The details of the steps being taken to expedite the functioning of these special economic zones at the earliest.

Although interest in indoor air pollution seems relatively recent, our earliest evidence of air pollutants often comes from indoor environments, such as dwellings filled with smoke and associated pollutants from poorly ventilated fires. When cities developed, these also became associated with pollution problems. The development of air pollution over the last 700–800 years seems to follow consistent patterns. Air pollution has often been related to the history of fuel use and the perceptible change in air pollution that arises from the fuels. Increasing energy demands and the adoption of new fuels (sequentially: coal, petrol, diesel) have caused air pollution problems. Mieck (1990) has argued that the numerous pollution decrees from the Middle Ages are essentially a response to single sources of what he terms pollution artisanale. These were usually just one particular type of pollution and distinct from the later and broader pollution industrielle that characterised an industrialising world.

Air pollution has often been visible as smoke, photochemical smog and diesel smoke. The concentration of air pollutants from a given source, such as coal, seems to increase for a long period and undergo a decrease due to declining emission strength. The pollution from one source is often replaced by another (e.g. coal smoke by petrol-derived pollution).The patterns of changing air pollution, although similar from one country to another, can take place over very different timescales.

As this book's subtitle indicates, it will examine many of the main twentieth-century global forces, which often clashed with one another. This work also attempts to present different, also often conflicting, viewpoints about these forces. And the question mark in the book's title (An Age of Progress?) suggests that contending judgments exist as to whether the century was one of overall progress. Thus, the following pages are more of an analysis and assessment of the century than an introduction to it, and are intended for students or general readers who already possess a basic knowledge of it. A rough draft of this manuscript was used in an advanced team-taught undergraduate seminar in the winter of 2007, and it stimulated much healthy debate.

As with any work dealing with twentieth-century global history, this work is limited and selective. It deals with some, but not all, of the important trends of the century. Within these trends, it concentrates more on developments within the more industrialized world of western Europe, the United States, and Russia/USSR than on those in the less industrially developed parts of the world.

There are two reasons for the relative neglect of areas outside of the industrialized West and Russia. First, except for Russian history, which I have taught and written about for many years, my knowledge of non-Western countries is simply too limited to do more than mention some ways that my main trends interacted with them.