The SEZ Act 2005 (On Special Economic Zones) went smoothly through both houses of Parliament with not even a whisper audible to the country let alone any public discussion on it, so complete was the agreement among India's various parliamentary parties. Today as several of the parts of the country designated as the SEZs are aflame with people's movements of varying intensity, there is little doubt whose interests and opinions the pro-imperialist ruling class parties represent. To top all their flip-flops, the official left, in yet another move to appropriate people's opposition has now called for tepid changes in the SEZ Act 2005 on virtually all counts. Who will forget that their MPs were intact in Parliament when the Act was passed quietly a year earlier?

The idea of an SEZ was born essentially to short-circuit people's gains and circumvent people's opposition while facilitating foreign loot- it is true world wide. The first examples include 'industrial parks' set up in Puerto Rico in 1947 to attract investments from US. However the idea gained its current recognition with China's SEZs of 1980s. It was to create scope for FDI and of loot by foreign imperialist capital of the skilled labour being discharged from previous state enterprises even as Socialist China was dismantled by Deng. The areas were leased out to MNCs and geared for exports.

EPZs in India were precursors

India's ruling classes began with EPZs- Export Processing Zones- geared for 100% exports and with only promises that labour laws will be diluted to facilitate the same. Tax exemptions were given for five years. Side by side sops were announced for industries set up in backward areas like subsidized infrastructure and five year tax holiday for direct and indirect taxes. All this did not work to invite much investment. And in 2000 new EXIM policy allowed SEZs in joint sector and private sector and also converted the eight existing EPZs into SEZs.

SEZ ACT 2005

The SEZ Act 2005 also talks about facilitating exports, "to provide an internationally competitive environment for exports." What it actually offers are islands of no direct or indirect taxes in prime locations of India, for primarily real estate development with free infrastructure and with this bait it hopes to lure FDI. Potential developers are to put applications to the state Govts. which will send approved schemes to the Central Commerce Ministry's Board of Approval. Despite around 250 SEZs being thus approved, not FDI but builders and contractors are rushing towards SEZs.

There are only unwritten promises that at some future date, state govts. will dilute labour law provisions for these areas. But taxation has been circumvented as also all provisions of land ceiling laws. Corporates and MNCs will be able to subvert existing land holding laws and emerge as new land owners as comprador govts. use colonial Land Acquisition Act 1894 to secure prime land for SEZs at throw-away prices. It is another matter that the govts. are getting more than they bargained for on this sensitive issue of forceful land acquisitions. And a good many of the proposed SEZs are being opposed by the local people's struggles. In a nutshell, "The objective of SEZ include making available goods and services free of taxes and duties supported by integrated infrastructure for export production, expeditious and single window approval mechanism and a package of incentives to attract foreign and domestic investments for promoting export led growth." However there is no stipulation for any fixed percentage of exports nor in what time exports would start, nor time bound extension of facilities, and thus the conviction is growing that SEZs are all designed to facilitate entry into domestic market.

257 such areas have been given the green signal by the Board of Approval. While the RBI now dilly dallies after correctly labelling these areas as "Real Estate Zones" and cautioning Banks about advancing loans, the Finance Ministry is not very supportive of SEZs due to anticipated tax deprivation.

The Act states that the Central Govt. will decide minimum area and other terms. As of now 25% of the land is slated for production purposes, 40% for infrastructure, banks and green areas and the rest for commercial activities. In reality the second part is also for commercial purposes. Following spurt of criticism and movements, Congress talked of 35% being productive area, CPM went ahead to show 50% in West Bengal and no one tells why it should not be 100%.

The SEZ Act 2005 envisages an "Authority" as incharge of each SEZ area. There will be a designated court to try all civil cases and disputes arising within the area. This will probably become one of the ways to subvert the implementation of labour laws.

The conclave of Congress Chief Ministers was held at Nainital in the backdrop of rapid approval of SEZs to Developers, maximally Reliance who would develop the SEZs and be handed over the land. Steel giant POSCO has shown the true facts by getting an SEZ assigned to itself where its new steel industry is already slated to be built in Jagatsinghpur district in Orissa. Thus in effect it has rendered its entire new industrial project free of taxes. In the CMs' conclave, Sonia Gandhi grandly stated that agricultural land should not used for SEZs. This set off frantic declaration from various ministries about how only banjar and waste lands, or at best mono crop lands should be acquired. The Commerce Ministry has stated that no SEZ has been sanctioned on agricultural land. The fact is that such classification of land by Govts. is arbitrary and faulty and any way if waste land is available in such good amount, why they should not be reclaimed and distributed among the landless? In reality good agricultural land is being acquired with impunity- the rice bowl around Mumbai in Raigarh district, the Dabri area near Ghaziabad, Singur in West Bengal, Jagatsinghpur villages in Orissa, lands in Sangrur and elsewhere in Punjab. The list is long and the peasantry is protesting. Despite this, the Commerce Ministry has falsely released data that of the 25,000 hectares slated to be acquired for 181 SEZs, no farm land has been touched. It holds that nearly 9,800 hectares was lying with govts. and the rest with the companies concerned.

An interesting aspect of the SEZ phenomenon has been bespoken by a representative of a corporate house. He pointed out that with the tax cuts offered in these areas, movable industries from non-SEZ areas will move to SEZ areas. There is nothing in the SEZ Act to stipulate non-entry into domestic market for products of industries in SEZ areas. This would put industries outside such areas at serious disadvantage.

In the attack on agricultural land the aspect being underplayed is the enormous threat to agricultural production. As it is India had a long way to go to produce adequate agricultural production for its people. But a steady decline in cereal production, coupled with food imports, decline in agricultural production due to pro-imperialist policies, agricultural crisis and now this further attack on land, points to serious situation ahead.

Land hunger is rampant in Indian peasantry. In such a situation landless are being displaced while other sections face forcible land acquisitions. And the biggest panacea which so-called Left Front has come up with is five years consolidated minimum wages for agricultural labourers. In addition must be considered the rate at which natural mineral resources are being written off to MNCs for exports coupled with industries being sanctioned over large tracts far in excess of land needed. And the hated Land Acquisition Act being freely used to secure land, the rape of India's agricultural land is on forming a potent issue for peasant struggles.

Responses in SEZ Areas

The range of fightbacks by Indian peasantry is probably much in excess of what was anticipated by the ruling classes. Already sections of ruling classes themselves are being forced to raise slogans for modification of Land Acquisition Act and this is under pressure of local people's struggles. In Dabri, peasants resisting acquisitions have been subject to police firing, Left Front police has lathicharged peasantry of Singur for the same. The two huge SEZs sanctioned near Mumbai for Reliance are actually involving 45 villages which are the rice bowl of Raigarh district. Most of these farmers are small and marginal farmers. They are resisting land acquisition demanding instead a special agricultural zone in their area. In West Singhbhum in Jharkhand, adivasis chased managers of Essar group, tied their own dalal pradhan to a tree and later forced him to walk from village to village tied to a rope to beg forgiveness for acting as an agent of the company. The struggles in different areas of Punjab are well documented. These struggles if sustained and developed can well beat back the SEZ route to intensification of imperialist loot.