Citizens’ Research Collective on SEZ

G Virat Singh

Bangalore, November 29, 2007: A rose, by any other name, may smell as sweet, but would a Special Economic Zone (SEZ) evoke the same antagonism if it is called a hub? All over the country, the very concept itself is under a cloud following the vehement and violent opposition to the proposed SEZs at Nandigram in West Bengal and Nandagudi (near Bangalore) in Karnataka.

The trend now is to start an SEZ in the name of ‘industrial hub’. One such case is that of Ashok Kheny, executing the controversial Bangalore-Mysore Expressway project, giving the name ‘industrial hub’ to his proposed SEZ in the industrially-backward Bidar district in Karnataka.

Karnataka has become the third state, after Maharashtra and Andhra Pradesh, to unveil its own SEZ policy. Under a 12-point SEZ policy, all matters pertaining to SEZs will be looked after by an exclusive development commissioner.

The policy has declared SEZs as public utilities and exempted developers of SEZs, industrial units and other establishments within the SEZ from local taxes and levies.

Conditions have been laid while granting the approval to entrepreneurs planning to set up SEZs in the state, one of which was that the government would not assure them of land acquisition and water. Promoters of SEZs have been told to purchase land from farmers with their consent. If there was any government land to be allotted, it would be sold at the prevailing market rates.

The state has so far accorded specific SEZ approval involving 2502 acres in Bangalore urban and Bangalore rural areas, Mangalore, Hassan, Shimoga, Udupi and Mangal ore. Karnataka government has already taken up the development of SEZs exclusively for pharmaceuticals, food processing and textiles (mainly garments) in Hassan (midway between Bangalore-Mangalore on NH 48), information technology sector in Mangalore and for automobiles in Shimoga.

While several entrepreneurs have already set up textile units in the Hassan SEZ and have provided employment to nearly 20,000 locals at Hassan, the other two sectors – pharmaceuticals and food processing – are yet to come up there. The SEZs at Mangalore and Shimoga are non-starters. The state Government is also proposing to establish an exclusive SEZ for electronic hardware near the proposed international airport at Devanahalli.

Karnataka Industrial Areas Development Board (KIADB) is the State agency for implementation of SEZs either independently or in association with private sector partners.

SEZs are specifically delineated duty-free enclaves treated as a foreign territory for the purpose of industrial, service and trade operations, with exemption from customs duties and a more liberal regime in respect of other levies.

Foreign investment and other transactions, domestic regulations and infrastructure inadequacies are sought to be eliminated in the SEZs.

Source: NewIndPress.com