Reality Check India

Everything is wrong with us

Posted in Uncategorized by realitycheck on April 5, 2007

While the hotel is burning, it is hard to keep track of guests who are taking off with the furniture.Just made that up

New SEZ policy  


No, this is not an April Fools joke. The new SEZ policy imposes a maximum size restriction of 5000 hectares. Anywhere else in the world, the government would have imposed a minimum size of 5000 hectares.

This would mean trouble for the only three SEZs that make sense – Reliance, Mahindra, and DLF. All the piddly 10 or 20 or 50 acre SEZs are set to get approval and can start operations.

Where is basic scholarship ?

First a simple question.  Assume the SEZ policy works exactly as designed and we solve the land acquisition issues to the delight of the farmers.  For example we make every displaced farmer a crorepati and send them on a vacation trip to the Carribean. Bear with the exagerration for a moment. What national  purpose would a 300 or so SEZs of 10-50 acres each achieve ? A small compounded zone with artificial landscaping, fake palm trees, korean grass, mini golf course, few luxury apartments and a dirt road leading up to it.  Is that it ?

The IMF and ADB have both slammed the SEZ policy. Is anyone answering their questions ?  Here is Kamal Naths response to the IMFs questions in the style of a fictional discussion.

IMF : Clearly, when you have economic zones of the size of ten hectares being set up, it is not clear that all these benefits of infrastructure, regulation, and so on, can in fact be implemented in those ten hectares (link)

Kamal Nath : “Somebody from the IMF was preaching us. I have said that the IMF, sitting in Washington, need not try and give me wisdom on what SEZ is all about. I don’t want to be preached by the IMF at all,” he said, adding that ground realities and track record of such zones in various countries should be studied before a view is expressed.  (link)

Reality Check : Thanks for expressing yourself. Now please answer the IMF’s question. What is the purpose of a 10, 20, or even 100 acre SEZ ? You are not going to have a Jebel Ali or Shenzen there. A few tea shops, a couple of IT parks, a hundred Tata Indica taxis, a few aparments, and a couple of malls.  Get the picture ?

P. Chidambaram (from Shenzhen) : “We recognise that SEZs are a useful tool for industrial development, especially in areas where infrastructure is lacking. Where infrastructure already exist, it is perhaps not necessary to create SEZs,” India’s Finance Minister P Chidambaram said after inaugurating the first full-fledged branch of Bank of India here. (link)

Reality Check : When you talk about areas in India that are lacking in infrastructure, it is like talking about people with good hair in Tirupati. 

Anyway, Mr PC we know how you actually feel about the SEZ policy and tax holidays. We are with you on this one, but you should speak up now or hold your peace forever.

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3 Responses

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  1. Observer said, on April 6, 2007 at 2:09 am

    Because of pathetic governance, yet another state is being demanded after Telengana, Rayalaseema, Vidharba. Now it is Poorvanchal. Is India going to end up with a 100 states by the end of this century? Will each of these 100 states even respect the federal govt? What about policies like SEZs and VAT and Power and ….

    He said that RJD would be concentrating on the assembly seats in the eastern region of the state bordering Bihar.

    Yadav also supported the demand for a separate state of Poorvanchal comprising districts of the eastern Uttar Pradesh and alleged that the region was neglected by successive governments.

  2. Barbarindian said, on April 6, 2007 at 3:29 am

    India’s final destiny is multiple princely states. It is a matter of choice whether you want to do it like Africa or Europe or Middle East. Once again, no prejudices on anyones choice.

    Jai Hind.

  3. vatsan said, on April 6, 2007 at 6:11 am

    who said the SEZ policy is to promote SEZ? u made that flawed assumption.

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