CHAPTER – 5 SPECIAL ECONOMIC ZONE WITH SPECIAL...

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CHAPTER – 5

SPECIAL ECONOMIC ZONE WITH SPECIAL PERCEPTION OF

GUJARAT STATE

5.1 Introduction

5.2 Provisions under the Gujarat Special Economic Zone Act, 2004

5.3 SEZ in Gujarat State and Other States

5.4 SEZ and Land Acquisition in Gujarat

5.5 Impact of SEZ in Gujarat State

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5.1 Introduction

The state which is situated on the west coast of India, known as one of the

entrepreneur state of India and most leading industrialized states in India is Gujarat

state. It is well connected to all major port based trade routes such as China, U.S.A.,

Canada, Europe, Gulf Countries, Japan, Korea etc.

Before independence, the Gujarat is the leading industrialized state of India. It

is big club of multinational corporations, private sector companies, public sector

enterprises and a large number of medium and small scale industries. Because of this,

it is also known for its entrepreneurial spirit as well as healthy social and physical

infrastructure. It enjoys outstanding labour environment and is supported by a

responsive bureaucracy. The state has various advantageous features like proactive

administrative set-up, simple and transparent procedures for investment, natural

resources, business friendly environment, educated and hardworking manpower, a

diversified agricultural and industrial set up, educational institutions, extensive road

and rail network connecting all major cities of the country, airport facility, large

consumer base etc., As a result of this Gujarat has been attracting large number of

investors for invest their money into the different sectors of economy. Moreover, the

information technology and tourism sector also attract huge investment opportunities

in the state. Gujarat has become one of the most favorable locations for industrial

investment in the country. It has considered as most dynamic entrepreneurs.70 All the

primary as well as supplementary resources are well available in Gujarat state. The

industrial policy of Gujarat state is preferable and favorable to business man so it

attracts not only Indian investors but also foreign investors.

Gujarat contributes more than 7.5% to India GDP and 18% to India fixed

capital. More than 10% of the country’s factories are in Gujarat while its

manufacturing sector contributes 28% to its GSDP. Inspite of the global economic

meltdown, Gujarat achieved an annual GSDP growth of 10% in 2005-13 which is

more than the national average in the same period.71

70 Information relating Gujarat state available at : http://business.gov.in/investment_incentives/gujarat.php

71 Socio Economic Review, 2013-14, Govt. of Gujarat, July 2014.

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For Business Gujarat consider as the famous state in the India. Gujarat is one

of the first states in India to set up exclusive Export Processing Zones (EPZs) to boost

export and promote economic growth. The first EPZ came up at Kandla port in

Gujarat in 1965 i.e the Kandla Free Trade Zone (KFTZ). It was a humble but very

prestigious beginning for the SEZ. Several others followed in various parts of the

state. It was the first of its kind in Asia which was initially set up as an export

processing zone. However, the EPZs could not deliver the expected economic returns

due to lack of proper management.

At the state level, even before India’s SEZ Act, 2005 came into effect; an

over-enthusiastic government of Gujarat had already enacted a state-specific Special

Economic Zone policy and enacted the Special Economic Zone (SEZ) Act, 2004.

After having received the assent of the president on 30th March, 2004 the Special

Economic Zone Act, 2004 has been passed. It extends to whole of the state of

Gujarat. Gujarat has been at the forefront of SEZ creation. India is surrounded by the

Arabian Sea situated in the westernmost part. With a 1600-kilometer coastline Gujarat

is supported in a large number of natural harbors and ports. Because of this

geography, which is ideal for the promotion of exports, most of the SEZs in Gujarat

are concentrated on the coastal corridor of Mundra, Dahej, Jamnagar, Jambusar and

Hazira.

The Gujarat Special Economic Zone Act 2004 extends to the whole state of

Gujarat. It approves establishment of SEZs with the objectives of:

(a) Generation of additional economic activity;

(b) Promotion of exports of goods and services;

(c) Promotion of investment from domestic and

foreign sources;

(d) Creation of employment opportunities; and

(e) Development of infrastructure facilities.

The government of Gujarat provides various tax exemptions and incentives.

The government had earlier announced a scheme of sales tax incentives that offered to

new units in the district of Kutch. Under this scheme, new units set up between

31/7/2001 and 31/10/2004 was offered sales tax incentives in the form of either sales

tax exemption or deferment.

The Gujarat Special Economic Zone ACT, 2004, allows various fiscal

benefits. Some of them include:

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• All sales and transactions within the processing area of the Zone shall be

exempt from all taxes, duties, fees or any other levies under any State law to

the extent specified below :

• Stamp duty and registration fees payable on transfer of land meant for

approved Units in the Zone. Levy of Stamp duty and registration fees on loan

agreements, credit deeds and mortgages executed by the Unit, industry or

establishment set up in the processing area of the Zone.

• Sales Tax, Purchase Tax, Motor Spirit Tax, Luxury Tax, Entertainment Tax

and other taxes and cess payable on sales and transactions.

• Inputs (goods and services) made to Zone Units from Domestic Tariff Area

shall be exempted from sales tax and other taxes under the State laws.

The existence of SEZs in Gujarat has its roots in natural infrastructure which

available into state. Gujarat is a peninsula with a coastline of 1600 kms. This coastline

is developed with almost 41 small, intermediate and large ports. These ports have

been used for all kinds of shipping activities and are taking care of maximum import-

export activities being undertaken in Gujarat in India. These minor and intermediate

ports of Gujarat handle about 8.5% of national shipping cargo. They handle about 16

million tones of cargo annually, which accounts for 70% of the total cargo handled by

all minor ports of India. An average annual export growth rate from the year 2000 to

2010 of these ports is 37. 39%.72

The main objectives of Gujarat SEZ Act, 2004 was to boost manufacturing

activities, infrastructure development, export promotion and generate more

employment in the state.

Moreover the other state had also paased the Special Economic Zone Act but

Gujarat is first state which would passed this act. Following are list of states who had

been passed this act:

1. Haryana state Government has been passed on the 17th January,

2006 known as The Haryana Special Economic Zone Act, 2005

2. The Government of Madhya Pradesh had been passed the

Indore Special Economic Zone (Special Provisions) Act, 2003 for the

development, operation, maintenance and administration of Indore Special

72 Gujarat Maritime Board, http://www.gmbports.org

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Economic Zone in the state of Madhya Pradesh and for matters connected

there with.

3. The Tamil Nadu State Government makes certain special

provisions in relation to special economic zones in the states of Tamil Nadu

and for matters connected therewith and incidental there to. This act may be

called the Tamil Nadu Special Economic Zones (Special Provisions) Act,

2005 and came in to force on the 8the August, 2005.

4. Only the government of West Bengal has been passed the

Special Economic Zone Act on earlier than Gujarat. This act called the West

Bengal Special Economic Zone Act, 2003.

5. The Punjab Government had been passed the Punjab Special

Economic Zone Act, 2009.

The Gujarat state is from very beginning conscious about economic

development of the state so very early stage as well as before the central government

passed act. Moreover only the Gujarat state in exercise of the powers conferred by

section 26 of the Gujarat Special Economic Zone Act, 2004 (Guj. 11 of 2004), the

Gujarat Special Economic Zone Development Authority, with the previous approval

of the State Government. These regulations may be called the Gujarat Special

Economic Zone Regulations, 2007.

5.2 Provisions under the Gujarat Special Economic Zone Act, 2004 The Government of India has announced in 2002-2007 the EXIM Policy

relating to Special Economic Zone with a view to augmenting infrastructural facilities

for export production. The Central Government has also offered various incentives

and facilities to the Developer of the Zone as well as the industrial unit to be set up in

the Zone. The concept of Special Economic Zone is to bring large dividends to the

State in terms of economic and industrial development and the generation of new

employment opportunities. The State Government has already declared its policy

regarding the establishment of such Zones in the State. In order to achieve rapid

economic growth to attract investment and to ensure systematic and integrated

development of the industry in the State, it is considered necessary to enact a law for

the establishment of the Special Economic Zone in the State.

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With a view to secure planned development of the Special Economic Zone in

the State, the development authority consisting of high ranking officers has been

constituted. It is the responsibility of the developer of a Zone to develop, construct,

install, operate, manage and maintain all the infrastructural facilities, amenities and

services in the Zone.

In order to streamline the system and speedy clearance, the management of the

Zone has been entrusted to the Development Commissioner. All the powers, duties

and functions conferred on the Commissioner of Labour under various labour laws

have been given to the Development Commissioner of the Zone. The single window

system has been adopted for the Zone by way of providing a common application

form for approval, clearance, licence, registration and no objection certificate under

the various laws and to submit single return for two or more laws. The Developer of

the Zone has to provide facilities of water, road, bridges, gas distribution network etc.

and the area of the Zone would be an industrial township.

With a view to attract the Industrialists and entrepreneur to establish industrial

units in the Zone, the State Government has proposed to grant the various fiscal

benefits. The unit which intends to set up captive power plant in the Zone has been

exempt from payment of electricity duty for a period of ten years. The stamp duty and

registration fee payable on transfer of land in the Zone has been exempted and there

would be no registration fee or stamp duty leviable on loan agreement, credit deeds,

mortgages executed by the unit in the processing area of Zone. The sales tax, purchase

tax, motor spirit tax, luxury tax, entertainment tax and other taxes and cess payable on

sales and transactions have also been exempted. The inputs made on Units from

Domestic Tariff Area have also been exempted from sales tax and other taxes under

the State laws. In applying flexible labour policy in the Zone, certain labour laws

enactments have been amended.

The Gujarat Special Economic Zone Act, 2004 came in to force on the 10th

February, 2004. Following are some important provisions of this Act. Section 2(n) Definition of Special Economic Zone

SEZ means the area declared by the Government of India as the Special Economic

Zone.

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Section 3 Procedure of establishment of Special Economic Zone

1. Any persons desirous of establishing the Special Economic Zone shall make

an application in such form containing such particulars and documents and

accompanied by such fee as may be prescribed, to the State Government.

2. The State Government shall scrutinize the application received under sub-

section (1) and recommend the same, with modification, if any, to the

Government of India for its approval and declaration of the area to be the

Special Economic Zone and appointment of the Developer for such Zone.

Any one either jointly or severally by the central government, state

government or any person established SEZ under this Act for manufacture of goods or

rendering services or for both or as free trade and warehousing zone. For approval of

SEZ under the Gujarat SEZ Act, 2004, they had to fill an application form along with

application fee of Rs. 5000 in mode of DD and also attached additional information

like project format, memorandum and article of association, annual report of company

or group of last year.

According to Section 2(d) “Developer” means a person or body of persons,

company, firm or such other private or Government undertakings, who develops,

builds, designs, organizes, promotes, operates or maintains or manages a part or

whole of the infrastructure facilities and amenities of the Zone and appointed as such

by the Government of India.

Section 4 Constitution of Special Economic Zone Development Authority

The Authority shall be a body corporate with perpetual succession and common seal

and may sue or be sued in its corporate name.

Section 6 Functions and powers of Authority

The functions of the Authority shall be to secure planned development of the Special

Economic Zone in the State and it shall be primarily responsible for the promotion,

development and functioning of the Zones in the State.

For the purpose of development of the Zone, the Authority shall have following

powers and perform the following functions, namely:-

• to recommend the name of Developer to the State Government in the manner

as may be prescribed, for a part or whole of infrastructure facilities and

amenities of the Zone, notwithstanding anything contained in the Gujarat

Infrastructure Development Act, 1999;

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• to prepare the guidelines for the development of the zone with regard to land

usage, floor space level, environmental provisions, safety measures and such

other matters as may be directed by the State Government;

• to prepare techno-economic feasibility report or a detailed project report as

may be required for the development of the Zone when the Zone is to be

established by the State Government or the Corporation owned and controlled

by the State Government.

• to acquire land in the Zone, by consent agreement or through proceedings

under the Land Acquisition Act, 1894 for the purpose of this ACT

• to approve allocation of the Government land in the Zone in the manner as

may be prescribed.

• to enter into joint venture arrangement for development of different

components or activity of the project of the Zone when the Zone is to be

established by the State Government or the Corporation owned and controlled

by the State Government

• to co-ordinate with the departments of the State Government and the Central

Government and ensure timely implementation of projects and plans of the

Zone

• to perform such other functions as may be assigned by the Government of

India for development of the Zone

• to perform such other functions as may be assigned by the State Government.

Without prejudice to the provisions of sub-sections (1) and (2), the Authority shall

exercise the following powers and perform following functions, namely:-

• to ensure the compliance of the approved master plan and may approve any

modification in the plan if required by the Developer and provide the guiding

principles for town planning and urban development standards to be

implemented by the Developer;

• to nominate member in the Special Economic Zone Development Board, Unit

Approval Committee, Development Committee and other committees as may

be required.

• to oversee the activities and compliance of functions of Unit Approval

Committee and Development Committee of respective Zone and to provide

guidance

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• to constitute such other committees as may be necessary to perform any

specific function of the Zone.

The Authority may, by general or special order, delegate such of its powers and

functions, on such conditions as may be specified in the order, to the Development

Commissioner or to the Development Committee of the Zone.

Section 8 Unit Approval Committee

In addition to the members of the Unit Approval Committee constituted by the

Government of India for the Zone.

Section 9 Functions of the Unit Approval Committee

In addition to the functions entrusted by the Government of India, the Unit Approval

Committee shall grant necessary local and State level clearances, approvals, licences

or, as the case may be, registrations under the State Acts for setting up a Unit within

the Zone in such manner as may be prescribed by the regulations, namely:-

i. registration of unit and grant licence for starting, running and operating of the

unit, under any of the State Acts

ii. site clearance under the Factories Act, 1948 on behalf of Inspectorate of

Factories and Boilers;63 of 1948

iii. approve the plan for establishment of Factory under the Factories Act, 1948 63

of 1948

iv. registration of boilers on behalf of the Chief Inspector of Boilers

v. to resolve disputes of commercial nature between the agencies providing

services and the consumers in the manner as may be prescribed by the

regulations

vi. to resolve any dispute between the Unit and the Developer regarding

infrastructural facilities and amenities and services in the manner as may be

prescribed by the regulations and the decision of the Unit Approval

Committee thereon shall be final

vii. any other approval or clearance which may be authorized by the State

Government by general or special order for the purposes of this ACT.

The Unit Approval Committee shall supervise and monitor, clearances,

approvals, licences or registrations granted by it and may take appropriate action

under the relevant applicable laws for breach of or non-compliance of any terms and

conditions of any such clearance, approval, licence or registration.

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The Unit Approval Committee may appoint any agency to supervise and

monitor the clearances, approvals, licences or registrations granted by it and may call

for any information required to supervise and monitor such clearances, approvals,

licences or registrations.

Section 10 Single window clearance

Notwithstanding anything contained in any other law, the State Government may, -

i. prescribe a common application form for approval, clearance, licence,

registration and no objection certificate under one or more laws

ii. authorize the Development Commissioner to exercise such of the powers of

the State Government or a body subordinate to the Government as may be

specified by general or special order

iii. prescribe a single return for reporting under two or more laws;

iv. authorize an officer or agency for monitoring the compliance of the laws

applicable in the Zone.

Section 11 Special Economic Zone Development Committee

There shall be a Special Economic Zone Development Committee.

Section 12 Functions of Development Committee

The Development Committee shall perform the following functions in the manner as

may be prescribed by the regulations, namely,

1.

a. prepare a plan for the development of the Zone in conformity with the

guidelines prepared by the authority and to demarcate and develop sites for

industrial, commercial, residential and for other purposes according to the plan

b. provide infrastructure facilities and amenities

c. allocate and transfer, either by way of sale or lease or otherwise, plots of land

for industrial, commercial, residential or other purposes

d. regulate the construction of buildings.

2. Erection of substantial boundary marks defining the limits of or any alteration

in limits of the Zone.

3. Ensuring that the Units and the residents have access to the following basic

and essential infrastructure facilities and amenities, namely :-

a. public streets, bridges, sub-ways, culverts, causeways and the like

b. public transportation facilities

c. power supply

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d. water supply

e. adequate drains, drainage facilities and public latrines, water-closets, urinals

and similar conveniences

f. collection and treatment of sewerage

g. collection, treatment and disposal of industrial and township solid waste

h. lighting of public streets, municipal markets and other public buildings

i. maintenance of public monuments, open spaces and other public property.

4. Ensuring that the Units and the residents have access to the following social

infrastructure facilities and services in accordance with the growth of the Zone

and requirements of the Units and the residents, namely:-

a. public hospitals and dispensaries

b. ambulance service

c. places for the disposal of the dead and disposing of unclaimed dead bodies

d. pubic markets, slaughter houses

e. schools for primary, secondary and higher education

f. maternity and infant welfare houses and centers

g. public parks, gardens, playgrounds and recreational facilities

h. police stations

i. maintaining a fire-brigade equipped with suitable appliances for the extinction

of fires and the protection of life and property against fire

j. any other social services.

5. Reclamation of unhealthy localities, the removal of noxious vegetation and the

abatement of all nuisances.

6. Registration of marriages and births and deaths under the 18 of 1969

provisions of the Bombay Registration of Marriages Act, 1953 and the

Registration of Birth and Deaths Act, 1969.

7. Conducting public vaccinations in accordance with the Provisions of the

Bombay District Vaccination Act, 1892.

8. Prevention and checking the spread of dangerous diseases.

9. Removal of unauthorized construction and encroachments.

10. Removal of obstructions and projections in or upon streets, bridges and other

public places.

11. Naming or numbering of streets and of public places and the numbering of

premises.

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12. Determine the chares for infrastructural facilities, amenities and services

provided by the Developer.

13. Monitoring town planning standards set by the Development Authority.

14. Such other functions as may be assigned by the Authority.

Section 15 Supply electricity and exemption from duty

1. Any person generating electricity in the Zone, may supply electricity to the

Gujarat Electricity Board after obtaining the approval from the State

Government and upon the terms and conditions agreed to by the supplier and

the Board.

2. The Unit located in the processing area of the Zone shall be exempted from

the electricity duty under the Bombay Electricity Duty Act, 1958, for a period

of ten years from the date of production in the case of manufacturing unit and

from the date of supply of services in case of service unit.

Section 17 Delegation of powers of Labour Commissioner to Development

Commissioner.-

1. Notwithstanding anything contained in the Acts specified in Schedule I, the

powers, duties and functions conferred on Commissioner of Labour or any officer

under those Acts shall be exercised by the Development Commissioner or any officer

authorized by him in this behalf.

2. The State Government may, as and when considered necessary, by notification in

the Official Gazette, amend Schedule I and thereupon Schedule I shall be deemed to

have been amended accordingly : Provided that when Schedule I is to be amended by

adding an Act made by the parliament, such amendment shall be made with the prior

approval of the Government of India

Schedule I

Sr. No. Short Titles

1. The Payment of Wages Act, 1936

2. The Industrial Employment (Standing Orders) Act, 1946

3. The Bombay Industrial Relations Act, 1946

4. The Factories Act, 1948

5. The Minimum Wages Act, 1948

6. The Industrial Disputes Act, 1947

7. The Working Journalists and other Newspaper Employees (Conditions

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of Service) and Miscellaneous Provisions Act,1955

8. The Maternity Benefit Act, 1961

9. The Payment of Bonus Act, 1965

10. The Beedi and Cigar Workers (Conditions of Employment) Act, 1966

11. The Contract Labour (Regulation and Abolition) Act, 1970

12. The Payment of Gratuity Act, 1972

13. The Equal Remuneration Act, 1976

14. The Inter-State Migrant Workmen (Regulation of Employment and

conditions of Service) Act, 1979

15. The Child Labour (Prohibition and Regulation) Act, 1986. 61 of 1986.

16. The Persons with Disabilities (Equal Opportunities, Protection of

rights and Full Participation) Act, 1995

Section 18 Amendment of certain Acts

Each of the Acts specified in the second column of Schedule II shall be amended in

the manner and to the extent specified against it in the third column thereof.

Schedule II

Sr.No. Name of Enactments

Extent of amendment

1 The Bombay

Industrial

Relations Act,

1946

In section 2, after sub-section (4), the following

subsection

shall be added, namely :-

“(5). The provisions of this Act shall not apply to the

industry, unit or establishment set up in the Special

Economic Zone declared as such by the Government

of

India.”.

2 The Factories Act,

1948

In section 66, in sub-section (1), after the proviso, the

following proviso shall be added, namely :-

“Provided further that the State Government may, by

notification in the Official Gazette, vary time limit

laid

down in clause (b) in respect of any factory situate in

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the Special Economic Zone declared as such by the

Government of India, subject to the following

conditions, namely :-

(a) The employer shall provide for free transport

facilities to and fro from the residence to the place of

work for women employees.

(b) The employer shall ensure security for women

employees at place of work and during

transportation.

(c) The employer shall provide facility for separate

Creches and rest rooms for women employees.”.

3 The Industrial

Disputes Act, 1947

In section 2, in clause (n), after sub-clause (v), the

following clause shall be inserted, namely :-

“(va) Any service in the industry or establishment set

up in the Special Economic Zone declared as such by

the Government of India.”.

4 The Contract

Labour

(Regulation and

Abolition) Act,

1970

In section 2, in clause (e), in sub-clause (ii), after the

words “carried on” the following words shall be

inserted, namely :-

“other than the place or area of the Special Economic

Zone declared as such by the Government of India.”.

5 The Trade Unions

Act, 1926

In section 22, after the first proviso, the following

proviso shall be added, namely :-

“Provided further that all the office bearers of the

registered trade unions of the industrial

developments

situated in the Special Economic Zone declared as

such

by the Government of India shall be persons actually

engaged or employed in an industry with which trade

union is connected.”.

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Section 19 Consolidated returns under various laws

The Units in the Zone shall furnish the Consolidated Annual Report in the prescribed

form to the Development Commissioner instead of periodical returns under the

following acts, namely :-

i. The Workmen’s Compensation Act, 1923; 8 of 1923.

ii. The payment of Wages Act, 1936; 4 of 1936.

iii. The Factories Act, 1948; 63 of 1948.

iv. The Minimum Wages Act, 1948; 11 of 1948.

v. The Maternity Benefit Act, 1961; 53 of 1961.

vi. The Payment of Bonus Act, 1965; 21 of 1965.

vii. The Contract Labour (Regulation and Abolition) Act,1970;and

viii. such other Acts as the State Government may, by 37 of 1970.

Notification in the Official Gazette, specify : Provided that when any other

Act made by the Parliament is to be specified by the State Government, it shall be

specified with prior approval of the Government of India.

Section 21 State Taxes and Levies

1. All sales and transactions within the processing area of the Zone shall be

exempt from all taxes, cess, duties, fees or any other levies under any State

law to the extent specified below :

(a) Stamp duty and registration fees payable on transfer of land meant for

approved Units in the Zone.

(b) Levy of Stamp duty and registration fees on loan agreements, credit deeds and

mortgages executed by the Unit, industry or establishment set up in the

processing area of the Zone.

(c) Sales Tax, Purchase Tax, Motor Spirit Tax, Luxury Tax, Entertainment Tax


2. Inputs (goods and services) made to Zone Units from Domestic Tariff Area


3. The Developer shall also be entitled to the benefits of exemption provided in

subsections (1) and (2) for the entire Zone.

Gujarat SEZ Rules 2006

On the basis of the Act, Gujarat State SEZ Rules 2006 passed and certain

amendments were made in these rules.

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The SEZ Rules 2006 of chapter 2006 adopted from the old Act 2004 which

describes the process of establishment of special economic zone and appointment of

developer. According to the Rules every Special Economic Zone shall be under the

administrative control of a Development Commissioner and they avail certain Fiscal

as well as non-fiscal benefits. Following are some fiscal and non-fiscal benefits:

List of Non-Fiscal Benefits

The following non-fiscal benefits are provided for in SEZ Rules 2006.

1. Single window clearance prescribed a common application for approval,

clearance, license, registration and no objection certificate under one or more

laws

2. Infrastructure facilities and services that include generation and supply of

electricity; water extraction, treatment, transmission and distribution; waste

water treatment and solid waste management; provision of minor port and

related services; provision of roads and bridges; provision for gas distribution

network; provision for communication and data network transmission; and any

other services as may be prescribed by the regulations.

3. Supply of electricity

4. Water, road, gas and other facilities

5. Delegation of powers of Labour Commissioner to Development

Commissioner in which powers, duties and functions conferred on

Commissioner of Labour or any officer under those Acts shall be exercised by

the Development Commissioner or any officer authorized by him in this

behalf.

List of Fiscal Benefits

The fiscal benefits that the developer and the unit-holder in the zone can avail of.

1. State Taxes and Levies- All sales and transactions within the processing area

of the Zone shall be exempt from all taxes, cess, duties, fees or any other

levies under any State law to the extent specified below:

2. Stamp duty and registration fees payable on transfer of land meant for

approved Units in the Zone.

3. Levy of Stamp duty and registration fees on loan agreements, credit deeds and

mortgages executed by the Unit, industry or establishment set up in the

processing area of the Zone.

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4. Sales Tax, Purchase Tax, Motor Spirit Tax, Luxury Tax, Entertainment Tax


5. Inputs (goods and services) made to Zone Units from Domestic Tariff Area


6. The Developer shall also be entitled to the benefits of exemption provided in

subsections (1) and (2) for the entire Zone.

Over and above of the fiscal and non-fiscal benefits, the Rules mention norms related

to

a) Processing area

b) Non-processing area

c) Concession to contracts in SEZs (All Exemptions and concessions are allowed

to Contractor appointed by a Developer or Co-developer)

d) Exemptions for infrastructure for social purposes in non-processing area of the

Zone

e) Norms related to minimum area requirement for setting up of SEZ.

f) Norm for the Developer or Co-Developer to have at least 26% of the equity in

the entity proposing to create business, residential or recreational facilities in

an SEZ

g) Clearance to be given by State Government because while recommending a

proposal for setting up of an SEZ to the Board, the State Government indicates

whether the proposed area falls under reserved or ecologically fragile area

h) The State Government certifies details of land area.

Thus, the industry friendly SEZ policy of Gujarat has taken Gujarat from

traditional industrial clusters to industrial estates and has further advanced to establish

60 SEZs by the end of 2009-10.

5.3 SEZ in Gujarat States and Other States Under the SEZ Act, 2005, the Central Government has offered various

incentives and facilities both to developer of SEZ as well as the industrial units

coming up in SEZ. All types of units like manufacturing, trading or service activities

are allowed in SEZ. Gujarat has emerged as a leader in SEZ led industrial

development for boosting exports. There are approximately 20,858 hectares.

Following are classification:

Functional SEZs : 15

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Notified but non-functional : 17

Formal Approvals :13

Valid in-principal approvals :13

Total :58

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According to Chart, textile, apparel and IT/ITES SEZs comprise of 13% of the

total functioning SEZs in Gujarat. Multi products comprise 33%, and pharmaceutical,

non-conventional energy, electronic product and engineering 7% functioning in

Gujarat.

State-wise and Activity-wise Functional SEZs in India

Their distribution across States and Sectors is described in following tables:

73 Sectoral wise classification available at : http://www.scribd.com/doc/50705042/8/Ahmedabad‐Apparel‐Park

152

Distribution of SEZs across States in India74

Name of the State SEZs Established

by Central

Government

SEZs Established

by State

Government or

Private

Developers Prior

to SEZ Act

SEZs notified

Under SEZ Act,

2005, State

Government

Andhra Pradesh 1 - 35

Kerala 1 - 6

Karnataka - - 20

Tamil Nadu 1 4 23

Gujarat 1 2 10

Uttar Pradesh 1 1 4

Haryana - - 3

West Bengal 1 2 2

Rajasthan - 2 2

Chandigarh - - 1

Madhya Pradesh - 1 -

Maharashtra 1 - 17

Orissa - - 1

Total 7 12 124

74 Distribution of SEZs across in India available at: http://SEZindia.nic.in/writeraddata/pdf/List of operationalSEZs.pdf

153

Activity-wise Functional SEZs in India75

Business Activity

of SEZ

SEZs Established

by Central

Government

SEZs Established

by State

Government or

Private

Developers Prior

to SEZ Act

SEZs notified

Under SEZ Act,

2005, State

Government

IT/ITES - 2 78

Pharmacy - - 6

Multi-Product 6 2 9

Electronics 1 - 0

Engineering - - 8

Jems & Jewellery 1 2 1

Apparel - 2 1

Textile - - 2

Handicrafts - 2 -

Biotechnology - - 2

Food Processing - - 3

Footwear - - 2

Auto Ancillary - 1 -

Animation and

Gaming

- - 1

Aviation - - 2

Building Products - - 2

Conventional

Energy

- - 1

Non-Conventional

Energy

- - 2

Port Based - - 2

Power - - 1

75 Activity wise distribution SEZs available at; http://SEZindia.noc.in/writeraddata/pdfplistofoperationalSEZs.pdf

154

Telecom

Equipments

- 1 -

Transport

Equipments

- - 1

Total 8 12 123

District-wise Classification of SEZs in Gujarat76

Following are district wise classification of Gujarat State.

District No. of

SEZs

SEZ Activity

Ahmadabad 12 Apparel and Textile, Pharma, IT/ITES, industrial

Machinery & Ancillary

Amreli 2 Engineering, Alterantive Energy & Ancillaries

Bharuch 8 Multi-Product, Ceramic & Glass, Chemicals,

Pharmaceuticals, Hydrocarbon

Gandhinagar 7 Electronics, IT/ITES

Jamnagar 2 Multi-product

Kutch 12 Port based Multi-product, power, Textile & Garments,

Handicraft & Artisan, Polymer based Flat Steel,

Engineering, FTWZ

Surat 5 Gems & Jewellery, Apparel, Engineering, Power

Vadodara 3 Enginering, Biotech, IT/ITES

76 District wise distribution of SEZs : http://ic.gujarat.gov.in/promo‐sch/SEZlist.html

155

Gujarat’ Share in Economic Performance of India77

Sr.

No.

Particulars Year Gujarat India % Share

of

Gujarat

1 State Income GDP (At

Current Prices, in crores

2011-12 611767 8353495 7.32

2 State Income GDP (At

Constant Prices, 2004-2005,

in crores)

2011-12 398884 5243582 7.61

3 State Income NDP (at

Current Prices, in crores)

2011-12 533390 7476764 7.13

4 State Income NDP (At

Constant Prices, 2004-2005,

in crores)

2011-12 342088 4618809 7.41

5 No. of Factories 2010-11 21282 211660 10.05

6 Total Persons engaged (in

thousands)

2010-11 1290 12716 10.14

7 Value of output, in crores 2010-11 806783 4685213 17.22

8 Net value added, in crores 2010-11 89448 712640 12.55

9 No of Approved as well as

Notified SEZs

As on

December

2008

24 141 17.02

10 Investment in SEZ (rupees

in crores)

March

2008

41733 69350 60.2

11 Land Area Approved for

SEZs (Former Approvals)

December

2008

20,731 70,037 29.6

12 Land Area Approved for

SEZs (Notified SEZs)

Total Land Area (in HA)

December

2008

9990 32435 30.8

77 Source: Source: Rajya Shabha Starred Question No. 195, dated on 12.03.2008 Note: Figures in parentheses are percentages to total employment and investment

156

After the analysis of these, though India conceived an idea of an export

processing zone way back in 1965, it could come with a full-fledged special economic

zone policy only in the year 2000. Even India enacted a Special Economic Zone Act

in 2005 at least after 40 years.

Employment Ratio of SEZ in Gujarat State

The direct additional total employment generation in SEZs across 15 major

states in the country was estimated at 1,46,128 persons, which included employment

of 61,015 persons in SEZs notified under SEZ Act 2005, 23,995 persons in 12 private/

State Government SEZs and 61,118 persons in 7 Government SEZs. The state of

Maharashtra was noticed to show the highest share (27.35 per cent) in total additional

direct employment generation in SEZs across 15 states, followed by Tamil Nadu

(21.36 per cent), Karnataka (13.12 per cent), Gujarat (10.15 per cent) and Andhra

Pradesh (9.43 per cent). The total investment in new generation SEZs across 15 states

was estimated at Rs.70,226 crores, which encompassed current investment of

Rs.67,347 crores in SEZs notified under SEZ Act 2005 and an investment of Rs.2,879

crores in 12 private/ State Government SEZs

Table 2: State-wise Employment and Investment Status of SEZs in India (As on

31st December, 2007)78 States Direct

Employment

in SEZs

Notified

under SEZ

Act

Employmen

t

Generation

in 12

Private/Stat

e

Govt. SEZs

Incremental

Employmen

t

Generated

in

7 Govt.

SEZs

Total

additional

Direct

Employmen

t

Generated

Current

Investmen

t

in SEZs

Notified

under

SEZ

Act

Current

Investme

nt

in 12

Private/

State

Govt.

SEZs

Total

Invest

ment in

New

Genera

tion

SEZs

(in

Cores

Rs.)

Andhra

Pradesh

12236 - 1549 13785(9.43) 1513 - 1513(2.

16)

Chandigarh 1113 - - 1113(0.76) 81 - 81(0.12)

78 Supra note 67 page no. 159

157

Goa 24 - - 24(0.02) 47 - 47(0.07)

Gujarat 4985 5140 4702 14827(10.15

)

35951 316 36267(5

1.64)

Haryana - - - - 3836 - 3836(5.

46)

Karnataka 19178 - - 19178(13.12

)

3234 - 3244(4.

62)

Kerala 534 - 4925 5459(3.74) 462 - 462(0.6

6)

M.P. 4 2462 - 2466(1.69) 121 460 581(0.8

3)

Maharashtr

a

3931 - 36038 39969(27.35

)

2530 - 2530(3.

60)

Orissa - - - - 25 - 25(0.04)

Punjab 3300 - - 3300(2.26) 348 - 348(0.5

0)

Rajasthan 20 3018 - 3038(2.08) 9 144 153(0.2

2)

Tamil Nadu 14594 8818 7807 31219(21.36

)

4789 1777 6566(9.

35)

U.P. 946 255 3334 4535(3.10) 557 136 693(0.9

8)

W.B. 150 4302 2763 7215(4.94) 30 47 77(0.11)

India 61015 23995 61118 146128 67347 2879 70226

Gujarat alone showed more than 50 per cent share in total investment in new

generation SEZs among 15 major states in the country. The other major states

attracting significant investments in SEZs were Tamil Nadu, Haryana, Karnataka and

Maharashtra. The state of Gujarat had attracted major investment despite the fact that

this sate accounted for only 10 per cent share in total employment generation in SEZs

across 15 states in the country. In contrast, the state of Maharashtra showed the

highest level of employment despite having only 3.60 per cent share in total

investment in SEZs across 15 major states in the country. This establishes no direct

correlation between the level of investment and employment in SEZs across states in

the country.

158

State-wide distribution of SEZs (Number)

Top Rung States Middle Rung States Low Rung States

States Formal Notified States Forma

l

Notifie

d

States For

mal

Notifi

ed

Maharashtra 111 55 West 25 11 Dadra 4 -

A.P. 103 68 Kerala 24 11 Uttarakhand 3 2

T. N. 69 49 M.P. 14 5 Chandigarh 2 2

Karnataka 52 27 Orissa 10 6 Nagaland 2 -

Gujarat 50 27 Punjab 10 2 Chhattisgarh 1 -

Haryana 46 30 Rajast

han

8 7 Jharkhand 1 1

U.P. 34 16 Goa 7 3 Pondicherry 1 -

Total 365 272 Total 98 45 Total 14 5

From the Independence the Gujarat is one of the leading industrial states in

India. The per capita income at current prices (2005-06) is $833, which is higher than

the national average of $627.2. The manufacturing sector contributes over 38 percent

of GDP. Gujarat ranks second in the country, in terms of the state-wise percentage

share in ‘Net Value Added by Manufacture’ generated by the factory sector.

The Gujarat State Industrial Development Corporation (GIDC) has been

establishing these clusters by setting up industrial estates since 1964. Gujarat has been

a front runner in industrial initiatives. It is the first state in India to formulate a Port

Policy, to enact the Private Sector Participation (PSP) Law to provide frame work for

participation in the infrastructure projects by the private sector, and to enact the SEZ

Act. The state has been taking several initiatives to promote industrial activity in the

state in recent years. The thrust is on promoting knowledge based industries. It has

been identifying competitive advantages of various regions in value added knowledge

based industries and trying to enhance them through state sponsored efforts. Several

proposals have been made to develop these nodes. 79

79 Aradhna Aggarwal, Department of Business Economics, University of Delhi, India, Economic impacts of SEZs: Theoretical approaches and analysis of newly notified SEZs in India on 23, February 2010, Online at http://mpra.ub.uni-muenchen.de/20902/ MPRA Paper No. 20902, posted 1. March 2010 16:00 UTC

159

Following data of tables also indicate that Gujarat state is more preferable

state for SEZ.

State Wise Distribution of Approved SEZs (As on 10-03-2015)

States/UTs Formal

Approvals In-principle approvals

Notified SEZs Exporting SEZs (Central Govt. + State Govt./Pvt. SEZs + notified SEZs under the SEZ Act, 2005)

Andhra Pradesh 33 4 29 19 Chandigarh 2 0 2 2 Chhattisgarh 2 1 1 1 Delhi 2 0 0 0 Goa 7 0 3 0 Gujarat 31 4 27 18 Haryana 29 3 25 6 Jharkhand 1 0 1 0 Karnataka 59 0 39 25 Kerala 32 0 25 14 Madhya Pradesh 13 1 8 2 Maharashtra 61 9 51 25 Manipur 1 0 1 0 Nagaland 2 0 2 0 Odisha 8 1 4 2 Puducherry 1 1 0 0 Punjab 4 0 2 2 Rajasthan 9 1 8 4 Tamil Nadu 54 4 50 36 Telangana 48 0 42 25 Uttar Pradesh 25 1 22 11 West Bengal 12 2 5 7 GRAND TOTAL 436 32 347 199

5.4 SEZ & Land in Gujarat Gujarat is the most industrialized state and it is engage in the production of

pharmaceuticals, soda ash, salt, plastics, petrochemicals and chemicals. Moreover it is

the world’s third largest and the India’s largest crude oil refining hub and producer of

processed diamonds, and the third largest producer of denim. It is a leading maritime

state of India with over 41 ports providing maritime access to North Indian states that

constitute about 25 percent of India’s GDP.

The unemployment level is between 2-5 percent of the total workforce

available monthly to daily variation. The Government of Gujarat has estimate and

160

investment of above 14-20 lakh crores in the industrial sector in coming 10 years.

The plan period target growth targeted to grow from 10.5 percent in tenth plan to 11.5

percent in eleventh plan period. Gujarat had been consider front runner in the

industrial development in the India and their policy makers have never been satisfied

with its share in the State Domestic Product (GSDP). According to NSS 64th round

report (2007-2008) states for each state/U.T. states unemployment at 5 per 1000 in

Gujarat against the national average 9 per 1000 persons. This is one of the least

unemployment ratios among the other states in India. 80

For the SEZ land acquisition is the biggest problem in India. But land

acquisition is not a problem in Gujarat. In contract to the ‘land for tillers” slogan in

Gujarat during 1970s, the present 21st century is poised to be marked in Gujarat as

land for industrialists. The Government of Gujarat assisted creation and promotion of

Special Economic Zone is an additional vehicle for facilitating distribution of land for

industries. The promise of attracting Foreign Direct Investment, creating employment

and exports of the goods in order to generate income to the state, by May 2010 about

60 SEZ has been under various stages of implementation in state. Because of this, it

is increased the utilization of land for the industrial purpose has never been same in

last 40 years of history of the state which ranks in third in industrial production in the

country. 81

Before the independence the land management for development land

acquisition for industrial and infrastructure development has always been a

controversial issue. For industrial development in setting up Special Economic Zones

like power plants, ports, and roads require substantial quantities of land to be

acquired. The demand-supply analysis in most of the sectors has inferred that land

will be a crucial resource that will need to be managed. Large parcels/quantities of

land are required for the development of an industrial park, SEZ, power plants,

townships, etc. land is also required as part of a Right of Way for constructing an

expressway or rail link. Various laws and procedures allow a Government Agency to

acquire land for such uses and for public purposes. However, these acquisitions are a

80 NSSO, (2009), NSS Report No. 531: Employment and Unemployment situation in India: July, 2007‐ June 2008.

81 Shashikant Kumar: Green Eminent, SEZ and SIR in Gujarat: Land for Industrialists, available at: http://www.scribd.com/doc/50704245/SEZ‐and‐Land‐in‐Gujarat#scribd

161

source of tension and delays that potentially derail projects and have a significant

impact on growth and development. This is a risk that needs to be managed. This

section deliberates on the current practices adopted by Gujarat for acquiring land for

development followed by an analysis of the various classes of issues that normally

delays the process. The section will also analyze some best practices used in acquiring

urban and rural land and build concepts for discussion on the issue of land acquisition.

These will form the basis for further deliberation prior to the preparation of the Draft

Final Report and finalization of some alternative methods that can be adopted. The

Government of Gujarat adopted process for acquiring land primarily; two processes

have been adopted by the Gujarat Government for appropriation of land for

development purposes – land acquisition and land pooling. Land Acquisition is

carried out under the Land Acquisition Act (LAA), while Land Pooling is carried out

using the provisions relating to Town Planning Schemes in the Gujarat Town

Planning and Urban Development Act (GTPUDA). While the LAA can be used in

both urban and rural areas, the Town Planning Scheme can be prepared only in an

urban area, to be more precise, in a Development Area designated under the

provisions of GTPUDA.

Before the new act the Right to Fair Compensation and transparency in Land

Acquisition, Rehabilitation and Resettlement Act, 2013 the Gujarat Government

follow the Land Acquisition Act, 1894 which enables the government to acquire

privately owned land for a bonafide public purpose. While the government can initiate

land acquisition for a public purpose directly through the LAA, the process can also

be initiated through the provisions of other legislations such as the Gujarat Industrial

Development Act (GIDA) or the GTPUDA.

This Act enacted in the Thirteenth Year of the Republic of India. The main

object of to make special provision for securing the orderly establishment and

organization of industries areas and industrial estates in the state of Gujarat and for

the purpose of establishing commercial center in connecton with the establishment

and organization of such industries and for that purpose to establish an Industrial

Development Corporation, and for purposes connected with the matters. 82

Following are some important provisions of this Act.

82 1. For Statement of Objects and Reasons See Gujarat Government Gazette,1962‐. Part‐V Pages 47, 48.

162

Section 29: Non application of Rent Control Acts to Corporation Premises:

The Bombay Rents, Hotel and Lodging House Rates, Control Act, 1947 or any other

law corresponding there to for the rime being in force in any part of the State

a. shall not apply to by premises belonging to or vesting in the corporation under

or for the purpose of this Act

b. shall not apply as against the Corporation to any tenancies, or like relationship

created by the corporation in respect of any such premises,

c. but shall apply to any premises let to the corporation

Section 30: Wherever any land is required by the Corporation for any purpose

in furtherance of the objects of the Act, but the Corporation is unable to acquire it by

agreement, the State Government may, upon an application of the Corporation in that

behalf, order proceedings to be taken under the relevant land acquisition law for

acquiring the same o n behalf of the Corporation as if such lands were needed for a

public purpose within the meaning of the relevant land acquisition law.

The amount of compensation awarded and all other charges incurred in the

acquisition of any such land shall be forthwith paid by the Corporation and thereupon

the land shall vest in the Corporation.

Section 31: Where in pursuance of section 30 any proceedings are taken for

acquiring any land for the Corporation, then in respect of such proceedings –

1. section 17 of the Land acquisition Act, 1894 as in force in the Bombay and

Kutch areas of the State,

2. section 17 of the Land Acquisition Act, 1894 as applied to the Saurashtra area

of the State, shall have effect as if the words “waste or arable” were deleted

from sub-section (1) thereof.

Section 32(1): For the furtherance of the objects of this Act, the State

Government may, upon such conditions as may be agreed upon between it and the

Corporation, place at the disposal of the corporation any lands vested in the State

Government.

After any such land has been developed by, or under the control and

supervision of the Corporation, it shall be dealt with by the Corporation in accordance

with the regulations made, and directions given by the State Government in this

behalf.

If any land placed at the disposal of the Corporation under sub-section (1) is

required at any time thereafter by the State Government, the Corporation shall replace

163

it at the disposal of the State Government upon such terms and conditions as the State

Government may after consultation with the Corporation determine.83

From the very beginning Gujarat state is conscious and serious for

development of the state. Only for this purpose they enacted the Gujarat Industrial

Development Act, 1961.

Land Dispute Flash Points

Disputes over land acquisition have turned into local points of conflict across

the country as this analysis of data collected in 2013-14 and 2012-13 reveals. There

has been 40 percent increase in such conflicts. Total 252 numbers of land conflicts in

more than 165 districts in 2013-14 and 177 numbers of land conflicts in more than

130 districts in 2012-13. These data are available from the society for promotion of

wasteland and development and the rights and resources initiative. But in these state

lists Gujarat state is excluded. It shows on following chart.84

00.51

1.52

2.53

3.54

4.55

2012‐13

2013‐14

83 Provisions regarding Gujara4t Industrial Development Act, 1961 available at: http://www.gidc.gov.in/pdf/act‐and‐rules/GIDC_ACT.pdf last vi5931sited 6/4/2015

84 Charts published in Indian Express on 30th March 2015 and data collected from the Society for Promotion of Wasteland Development & The Rights and Resources Initiative.

164

5.5 Impact of SEZ in Gujarat State While the state governments of the past years have favored, the current

government, led by the right wing Bharatiya Janata Party, which has been in power

for the last decade, has delineated policies that pace up this growth of industrial

expansion as a form of economic growth. Much hype has surrounded these policies,

the most prominent one being the Special Economic Zone Policy.

The liberalization of the Indian economy in the 1990s drastically changed the

way of business was conducted in India. The government came up with a new

economic business model to make the boost Indian economy and attract Foreign

Direct Investments (FDI). Thus, the concept of Special Economic Zones (SEZ)

originated. The main objective of this model was to create specially delineated, duty-

free enclaves for processing and exports. In April 2000, the SEZ policy was

announced, and in May 2005, the Indian parliament unanimously passed the Special

Economic Zone (SEZ) Act, 2005. Gujarat, one of the most industrialized states in

India has variety of industries including engineering and auto manufacturing, food

and agri-business, textiles, gems and jewelers, mineral and mining and ports and

shipbuilding. Some of the other important industries in the state include chemicals

and petrochemicals, pharmaceuticals and tourism.

However, Gujarat study become worth success story of India at a feverish

pitch on the grounds in Gujarat and it becomes a ‘model’ for the others to follow that

there has been virtually no opposition to land acquisition for SEZs. The states like

Andhra Pradesh, Himachal Pradesh, and Maharashtra are all keen to follow the

Gujarat SEZ model in their states to deal with the violent opposition that has received

much attention in the media, be it the case of Reliance’s Raigad SEZ or the Kakinada

experience in coastal Andhra and it is true that the common person has heard of the

Nandigram, Raigad and Jhajhhar (Haryana) protests but there are few stories of

movements against SEZs from Gujarat.

For Few stories of movements two arguments have been provided by

bureaucrats, the Gujarat Government and the Ministry of Commerce at the centre to

back the claim that Gujarat has been a “hassle free” state as far as SEZs are

concerned. First, the most ‘wastelands’ or non-agricultural private lands have been

transferred for SEZs and hence farmers have no reason to oppose. The second that the

165

State has stayed out of the land ‘acquisition’ process with private developers taking

the lead in purchasing lands directly from farmers.

• Nano Dispute

Tata Nano Singur Controversy refers to the controversy generated by land

acquisition of the proposed Nano factory of Tata Motors at Singur in Hooghly district,

West Bengal, India.

Singur gained attention by international media since Tata Motors started

constructing a car manufacture factory of Tata Nano at Singur. The small car was

scheduled to roll out of the factory by 2008.

The state government of West Bengal facilitated the controversy by using

1894 land acquisition act rule to conduct an eminent domain takeover of 997 acres

(4.03 km) of farmland to have Tata build its factory. The rule is meant for public

improvement projects, and the West Bengal government wanted Tata to build in its

state. The project was opposed by activists and opposition parties in Bengal.

The choice of Singur was made by the company among six sites offered by the

state government. The Tata Motors site is the most fertile one in the whole of the

Singur and the Singur block, in turn, it is among the most highly fertile in West

Bengal. Almost the entire local population depends on agriculture, approximately

15000 making their livelihood directly from it. With the number of direct jobs to be

created no more than about 1,000, many of which are expected to go to outsiders, the

local populace felt threatened for their livelihood. Environmental degradation is also

feared.

The rapid rise in the population of West Bengal has not been accompanied by

significant economic growth. Key indicators such as unemployment rates, poverty

rates, infant mortality rates, job growth rates, per capita income, mobile phones

penetration rates lag the more industrialized states of India. Local politicians gained

power by promising agricultural land to landless farmers but given West Bengal's

population density, the land-holdings are small and the yields are insufficient to

sustain poor families. While the shift from agriculture to industrial jobs requires re-

training, given India's economic growth, it provides an opportunity for earning higher

income. Several other states had offered land to Tata Motors for the project.

The people, staying in the proposed land were forced to evacuate by the

government. The compensation given was considered inadequate and the new housing

166

facilities offered were delayed. This led into the result of protest to the peasants

backed by opposition political parties. The company had made substantial promises.

According to their claims, Singur would become a mini-auto city and approximately

70 vendors would set up shop along with the factory. The total investment planned is

to the tune of Rs 1,000 crore. The project had, however, generated controversy right

from the start, particularly on the question of state acquisition of fertile agricultural

land for private enterprise.

The project faced massive opposition from displaced farmers. Chief protesters

include the opposition parties spearheaded by the Trinamool Congress under Mamata

Banerjee and Socialist Unity Centre of India. The movement has received widespread

support from civil rights and human rights groups, legal bodies, social activists like

Medha Patkar and Anuradha Talwar, Booker prize-winning author Arundhati Roy and

Magsaysay and Jnanpith Award winning author Mahasweta Devi. Other intellectuals,

writers like the poet Ruchit Shah, artists like Suvaprasama theatre and film

personalities like Saonli Mitra. Arpana Sen and manymore have pitched in. The state

police force has been used to restrict their access to the area. The Nobel Laureate

Amartya Sen supported the idea of factory but he however opposed forcible

acquisition of land.

The protesters have been attacked, verbally by the Communist Party of India

(Marxist) CPI (M) leaders and physically by the party's supporters. Bendy Konar

member of the party's state committee famously declared that protesting intellectuals

would be greeted by women supporters of the party by showing their behinds.

Officials of the state and Tata Motors faced protests in preliminary surveys

and manhandling on one occasion from the villagers organized under the Save Singur

Farmland Committee with Trinamool Congress forming its chief component. It is

reported that Naxalite elements hold sway over the direction of the agitation and the

Trinamool Congress chief Mamata Banerjee takes no decisions without consulting

them. Prohibitory section 144 imposed by the state government of the Indian Penal

Code for initially a month and then extended it indefinitely. The imposition has been

declared illegal by the Kolkata High Court. While landless peasants and share-

croppers fear losing out entirely, sections of the locals, particularly those owing

allegiance to the CPI (M) have welcomed the factory. These count chiefly among the

owners of bigger portions of the land even as discrimination in the compensation has

167

been alleged. A section of those promised jobs at the factory have boycotted classes

while training in protest against the alleged going back on the promise.

The land earmarked for the project was taken control of by the state

administration amidst protests and fencing off commenced on December 1, 2006.

Mamata Banerjee, who was prevented from entering Singur by the state police, called

a statewide bandh in protest while legislators belonging to her party turned violent in

the legislative assembly causing damage to furniture. Later, she went on a 25-day

hunger strike. During this period she presented affidavits of farmers apparently

unwilling to part with their land. The fenced off area has been regularly guarded,

besides large contingents of policemen, by cadres of the CPI (M) party. They were

accused of the multiple rapes followed by burning to death of teenage villager Tapaso

Malik who was active in the protests, on December 18, 2006. Negligence and

political interference in the probe into her death have been alleged. Later, CPI(M)

activist Debu Malik and based on his statement, CPI(M) zonal committee secretary

Suhrid Dutta were arrested by the Central Bureau of Investigation in connection with

the crime. Intermittent attacks by villagers have since continued on the fence.

However, continuing agitations against the project appeared to have proved

ineffective and a farmer who lost land committed suicide. On the other hand the pro-

factory villagers siding with the CPI (M) have made accusations against the Naxalite

faction of the ‘Save Singur Farmland Committee’ of threats and violence against

them.

Tatas ceremonially initiated the construction of the plant on 21 January 2007.

The Tata Group announced on October 3, 2008 that they are pulling out of Singur due

to the political unrest and agitation.

Other aspects of the process of setting up the factory that have come under

severe criticism are the government's secrecy on the details of the deal and the chief

minister's furnishing of false information, including in the legislative assembly

Vidhan Sabha. In particular, the concessions being given to Tata Motors have not

been publicly revealed. The falsehoods of the chief minister chiefly pertain to claims

made by him of having acquired 912 acres (3.69 km) through voluntary consent of the

owners without the use of force.

The Kolkata High Court declared the acquisition prima facie legal. The air

seemed to have cleared somewhat when the High Court ordered the state government

to submit correct figures following which an affidavit but was not satisfied with the

168

result. In a fresh affidavit filed later in June 2007, the government admitted to 30 per

cent of the land was acquired from farmers without consent. The affidavit remains

unclear on whether the lack of consent is based on insufficiency of the compensation

or refusal to sell altogether.

The critics of the government's industrialization policy have argued on the

other hand that while India is moving towards a "free market" economy, government

has been acting as a broker for the private sector by forcing private citizens to give up

their property at throw away prices.

On October 3, 2008, after a brief meeting with the Chief Minister, Ratan Tata

declared his decision to move the Nano Project out of West Bengal. Tata mentioned

his frustration with the opposition movement at Singur Project led by Trinamool

Congress chief Ms. Mamata Banerjee. Ms Banerjee responded by referring to actions

by Tatas and the state government.

The CM of Gujarat, Narendra Modi then sent an SMS to Mr. Ratan Tata, which

simply said "Suswagatham", to persuade him to relocate the Nano factory to

Gujarat.85

• Reliance Jamnagar Dispute Reliance Petroleum Limited (RPL) announced the commissioning of its

refinery into a Special Economic Zone in Jamnagar, Gujarat, India on 25 December

2008. The completion of the RPL refinery has enabled Jamnagar to emerge as a

‘Refinery Hub’, housing the world's largest refining complex with an aggregate

refining capacity of 1.24 million barrels of oil per day, more than any other single

location in the world. The Jamnagar refinery is situated 30 km away from the Kutch

District.

Reliance has proposed 4545 hectares (11,231 acres) SEZ adjacent to its

existing refinery complex. RIL’s existing refinery and petrochemical complex is

already operational since 1999. 7500 acres has been a great contributor to the energy

security of the country. Its world class facilities and capacity and competitiveness

have overnight transformed the country from net importer of petroleum products to 85Dispute relating Nano available at: http://en.wikipedia.org/wiki/Singur_Tata_Nano_controversy

169

net exporter. Jamnagar’s refinery alone contributes 76% of total exports of Reliance

Industries. This amounts to almost US $ 8.3 billion. In terms of volume, the exports of

refinery products from RIL’s Jamnagar refinery touched 13.51 million tones.

In Jamnagar framers were not ready to give their agriculture land so they

moved in November 2006,the High Court of Gujarat and later to the Supreme Court

in order to challenge the setting-up of a 10,000-acre (approx. 4,000-ha) SEZ by

Reliance Infrastructure. They claimed that the acquisition of large tracts of

agricultural land in the villages of the district not only violated the Land Acquisition

Act of 1894, but was also in breach of the public interest. This led the Government to

“consider” putting a ceiling on the maximum land area that can be acquired for multi-

product zones and decide to “go slow” in approving SEZs. 86

• Adani Group’s Mpsezl, Mundra Port And SEZ Ltd And Adani

Power Pvt. Ltd. The Mundra Port and Special Economic Zone (MPSEZ), promoted by the

Adani Group (a huge corporate conglomerate), is India’s largest port-led SEZ. The

MPSEZ, which falls in the Kutch region, is being developed over a sprawling 100-

square-kilometer area as a privately-operated, multi-project, diversified SEZ.

The state government has allocated the Adani Group 2,008.41 hectares reserve

forest land in Mundra for the MPSEZ at a cost of 966 million rupees (21.3 million

USD). It is estimated that the Adani Group got the land in Kutch at the extremely low

cost of 10 rupees (0.22 USD) per square meter. The land has been given on a right-to-

use basis by a Government of India order dated September 30, 2009. Shockingly, just

a year earlier, the same land was being sold off and leased out at the rate of between

700-800 rupees (15.5-17.7 USD) per square meter.

Much of the opposition to SEZs in India has centered on issues of land

acquisition, compensation and rehabilitation. Land Acquisition Act of 1894 to

implement development projects, land is acquired using the draconian, colonial-era.

In most acquisitions, the compensation paid to the farmers or communities is either

too low or non-existent. The Land Acquisition Act has come under severe criticism,

especially because the government often employs repressive measures to acquire poor 86 Adani dispute available at: http://www.parimalnathwani.com/images/from‐desk/ril/reliance_SEZ.pdf

170

people’s land, including the use of violent methods. When there is no redress for the

affected people’s woes, people are left with no other option but to agitate and at times

become aggressive and even violent.

The fisher folk in the Kutch region are also agitating and frustrated by a

development and infrastructure-building model that compels them to fight for their

survival. They are questioning the government’s development and land acquisition

strategies, which fill the pockets of private corporations and private individuals in the

name of the public good, while the state exchequer and the people’s own capital are

being drawn down in the name of development.

The fisherfolk all along the Kutch coastline are vehemently opposing the

MPSEZ. In Kutch district alone, around 1,000 people affected by the MPSEZ have

pledged to use non-violent methods of satyagraha (originally pioneered by Gandhi) to

regain their land lost to the SEZ.

The fisherfolk’s major allegation against the MPSEZ is that the Adani Group

has systematically violated the Coastal Regulation Zone (CRZ) laws by undertaking

activities that have wreaked havoc on the unique ecosystem of Kutch, including the

illegal filling of creeks, the reckless destruction of mangroves, and various illegal

constructions.

The fishing community of Kutch, in a Public Interest Litigation (PIL) filed in

the Supreme Court of India, in 2008 pointed out the violations at the Mundra Port.

The PIL highlighted the illegal filling of creeks that affected the fishing community.

The fishermen accused the Adani group of grabbing their grazing land as well as

blocking their path to the sea. Several environmental activists and NGOs working in

the area supported these claims. In court, they submitted satellite maps and

photographs of the region before and after the construction of the SEZ, which show

the extent of the damage done to the local ecology.

The Supreme Court issued a stay order temporarily stopping work at the

MPSEZ and asked the port management authority to investigate the allegations.

Surprisingly, the Supreme Court of India soon vacated (that is, canceled) the stay

order. The court did, however, issue a notice to the Adani Group requesting it not to

fill the natural creek in the area. However, the local fishermen are accusing the Adani

Group of violating the court’s order by continuously filling the creeks in order to

develop the MPSEZ. Meanwhile, in 2008, the Gujarat High Court directed both the

171

Kutch District Collector and the Gujarat Maritime Board (GMB) to inspect disputed

creeks near Mundra port.

The struggles of the community did not end there. The fishermen in the area

have been protesting against another project coming up as part of the MPSEZ, the

Water Front Development Project at Mundra Port. In April 2009, more than 5,000

fishermen across the Kutch region threatened to boycott the Lok Sabha polls

(parliamentary elections). They demanded an immediate stoppage of the project,

which adversely affected their livelihood.

For the fisher folk in the Kutch region, protecting their livelihood in the recent

past has involved a chain of struggles against the rapid industrial development in the

area. In August 2009, a violent incident took place in Bhadreshwar, a small hamlet in

Kutch, between the villagers and the security men of OPG Power Ventures, a

company building a coal-fired thermal power plant. The villagers have been

protesting against illegal constructions undertaken by OPG. The upcoming power

plant in Bhadreshwar, the second largest fishing centre in the Kutch region, would

displace the fisherfolk in the area and block their livelihood.

In yet another struggle, people in Navinal village filed a PIL demanding a

huge chunk of the gaucher (grazing) land allotted to MPSEZ be returned to them. The

villagers allege that MPSEZ is illegally undertaking constructions without clearances

and is destroying the precious mangroves in the region. The villagers are also

claiming that the state government’s sale of land to the Mundra SEZ is illegal. The

state government had sold the gaucher land for industrial use. This is in contravention

to various notifications that require certain amounts of land to be allocated to each

village for grazing, in proportion to the number of cattle in each village. They are

urging the state High Court to quash the land sale to MPSEZ and vest the gaucher

land to Navinal’s Gram Panchayat (local governing body).

Meanwhile, responding to a long series of submissions, memoranda and

requests from tireless local struggle groups and fisherfolk, a Ministry of Environment

and Forest (MoEF) delegation visited Bhadreshwar for a site inspection. The report of

this inspection, published in December 2010, points out that there have been

violations in the MPSEZ project, and in several places there has been large-scale

destruction of mangroves, especially at the northern port. The report further points out

that the MPSEZ has systematically obstructed the creeks systems and the natural flow

of seawater by illegal reclamations along the creeks.

172

The report also looked at some other projects in the MPSEZ and pointed out

that the ongoing airport construction is being done without proper environmental

clearances. The same goes for the upcoming Samundra Township in the MPSEZ area,

which falls within the Coastal Regulation Zone (CRZ) area and has no proper

clearances under the 1991 CRZ notification.87

87Adani dispute available at: http://base.d‐p‐h.info/en/fiches/dph/fiche‐dph‐8854.html

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