Everything is wrong with us
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 ?
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.
Previous posts on this topic :
- IT SEZs ( Everyone loves a tax holiday )
- SEZ Online Chat ( Facts about Chinese SEZs)
- PIO University to be setup in SEZ ( New policy framework announced by Vayalar Ravi – no time to blog about this nonsensical university ) Manipal is bidding for it.
- MAT and the IT holiday