India reviews economic zone policy as protests grow
22 Jan 2007 13:45:30 GMT Source: Reuters
(Adds minister's, environmentalist comments, details) By Surojit Gupta NEW DELHI, Jan 22 (Reuters) - India began a review of its policy on Special Economic Zones (SEZ) on Friday as opposition to them grows due to claims people are not being properly compensated for their land and doubts about their benefits. But a meeting of senior ministers said new guidelines would only be announced once more information from the country's affected states had been collected, probably within a week to 10 days, Commerce and Industry Minister Kamal Nath told reporters. "We discussed the issue of land, rehabilitation, possible misuse of tax incentives. The meeting remained inconclusive," Nath said. "Issue of land is a concern and once we get better feedback we will have a more holistic discussion." Prime Minister Manmohan Singh has said the government is working on a rehabilitation policy to enable farmers to get realistic compensation for their land. Twenty-four SEZs have been established in 11 months and more are planned. The zones, which are similar to operations in China and intended to boost growth and exports, have been criticised by farmers, non-governmental groups and political parties within and outside the ruling coalition. "Political parties have raised several concerns. It is not possible for one meeting to take on board all the concerns," Commerce Secretary G.K. Pillai said. He said the government would await the decision of the ministers' panel before approving any more SEZs, but added that work on 63 zones already approved would proceed. The Commerce Ministry expects the zones to draw nearly 600 billion rupees ($13.5 billion) in investment by 2009 and create 890,000 jobs, but the Finance Ministry says tax exemptions could lead to huge revenue losses. "I am not against SEZs, but I am against the proliferation of SEZs," Finance Minister Palaniappan Chidambaram told the Indian Express newspaper. The resistance to the zones has been particularly intense in West Bengal, where long-serving communist rulers have redistributed land to millions of poor peasants. Earlier this month, at least five people were killed and dozens injured when communist supporters clashed with opposition and Muslim activists opposed to the plan for a 14,500-acre (5,800 hectares) economic zone in the eastern state. A British-based think tank said on Monday India's SEZ policy was causing environmental damage and harming the livelihoods of some of the nation's poorest people and called on the government to repeal or significantly alter the policy. "The result is that SEZs are spreading on agricultural land, coastal fishing areas, and even conservation zones such as mangrove forests," said International Institute for Environment and Development's Krystyna Swiderska in a statement. "Land and common property resources such as forests are being acquired on a large scale, resulting in a loss of biodiversity and loss of livelihoods for the poorest people." ($1=44.3 rupees) (Additional reporting by Prithwish Ganguly and Nita Bhalla)
