The BJP government has resolved to restore the Special Economic Zone (SEZ) industrial model. This comes 17 years after a mass movement rejected the idea. The High Court of Bombay, Goa bench, had then upheld the decision of the government to cancel the land allotment. The court ruled that the allotments of land were made arbitrarily, without proper scrutiny of applications, and in undue haste.
CM Pramod Sawant may deem that with lucrative incentives not available in previous initiatives, SEZs could be nudged forward smoothly this time around. Earlier, SEZs had no apt legislative frameworks. It was in 2005 that the SEZ Act was legislated. Investors were, on the spot, attaching huge hopes that the Act would offer stability and ease of business.
If Goa were to carry this policy forward, it would carry the ignominious tag of handing out its political, economic, and cultural identity, and people’s aspirations would be shattered. Bureaucrats will run helter-skelter to identify strategic locations that counter structural and institutional bottlenecks arising from infrastructural deficiencies, procedural complexities, and other restrictive policies in such a small State.
After all, SEZ is intertwined with complex questions, including land acquisition, tax incentives, and socio-economic disputes. They seek cost-efficient, skills-abundant locations. To snatch away people’s best ability tantamounts to theft.
Anti-SEZ protests will sprout and grow, as before. Then, as now, policymakers were unprepared and clueless. Fearing sliding voter popularity, they tried to appease people by rolling back incentives. The numbers of approved and notified SEZs declined to 412 and 329, respectively, by 2015. Substantial amounts of land were de-notified between July 2012 and January 2015. In tilting the scheme, the Government introduced the concept of National Investment and Manufacturing Zones (NIMZs), adding “Old wine in new bottles.”
Does Goa need SEZs?
Global firms are organising their production and trade in increasingly complex global value chains and are scouting the globe for the least-cost locations. If Goa opens doors to SEZs, it would relegate itself to a vulnerable location. SEZs, at the start, were permitted 100% foreign direct investment (FDI) in manufacturing activity and individual investments, all of which were exempt from income tax. Offshore banking units would be permitted in SEZs with 100% income tax exemption on profit for the first three years and 50% exemption for the following two years. SEZ developers were exempt from income tax on capital for any block of 10 years in 15 years and from electricity duty for 15 years in demarcated zones.
Goa must create new industrially conducive ecosystems for MSMEs, SMEs, and industry partnerships that foster economic stability, future competitiveness, and promote sustainable growth. Handing economic growth to external investors will negatively impact Goa in the long term. The takings will go overseas, to other States, and to the handful of rich in Goa. The working classes and poor will be left to rely on crumbs from under the table. Heightened poverty and unemployment would be the net result.
There are manifold concerns of a multi-disciplinary nature that must prompt the government to rethink its ideas on SEZs. SEZs favour foreign investors over local businesses, causing an unequal distribution of benefits and wealth. SEZs will use legal sanction to engage in tax evasion and revenue loss, causing revenue loss for the government, thus undermining its ability to fund public services and infrastructure. Consequently, the government must convene consultative processes at all levels. It needs consent from the cradle of democracy—Panchayats and Zilla Parishads, Municipalities, and public stakeholders.
A policy that is bulldozed will be rejected by the people. SEZs will fail to make Goa self-sufficient. Goa would, instead, emerge as a dependent economy and end up vulnerable to fluctuations in global markets. SEZs will also demand humongous tracts of land, which, in turn, will create tragic displacement of local communities and livelihoods.
Besides, SEZs adopt appalling working conditions, low wages, and labour rights violations. They create environmental degradation and pollution and health hazards. Finally, they will intervene in subtle ways in the political systems because they want to retain dominance and influence over strategic sectors.
Goa must adopt a development paradigm that prioritises inclusive and sustainable development that prioritises local communities. SEZ frameworks have no place for fair competition; labour rights have no place. Goa needs to assert the non-negotiable: “GOANS FIRST.” An incentivised Goan entrepreneur will deter offshoring and outsourcing. The profits will circulate in local markets, and the gains will be local. The SEZ blueprint siphons off profits and takes them out to safe havens overseas.
A People’s Plan to resist the Government’s SEZ initiative is brewing. GOACAN plans to work within grassroots democratic spaces to elevate the issue at Gram Sabha meetings. GOACAN will access the RTI and ‘Gram Sabha Zagrut Za’ with movements to draw awareness among consumers about the right to safety. It has gone even deeper, given its intent to highlight the hazards to farmers and animals by addressing the Agriculture Department and the Department of Animal Husbandry and Veterinary Services.
Clearly, the government’s plan is meeting with stiff resistance even before it has inked a deal or drawn up the architecture for the SEZs. If the government turns the pages back, it will recognise that the SEZ struggle in Goa was a testament to the power of community resistance and the importance of upholding environmental and social justice.
The establishment of SEZs will mean devastating costs to local communities and ecosystems. By prioritising corporate interests over people’s livelihoods and the environment, SEZs perpetuate a
model of unsustainable and unjust development. The choice is this: Must Goa choose a people-centric justice-development model for all or hand over its prospects to an externally controlled bureaucracy that destroys self-rule?
