A climbdown by government officials in Goa, India’s smallest state, over the allocation of land to industrial parks, has been a victory for activists, but in other parts of India, the fight continues.

Medha Patkar, a prominent Indian social activist, recently began a march from Nandigram to Mumbai to highlight, she said, “the drawbacks” of the government’s Special Economic Zones (SEZs).

The government sees its SEZ policy as using private sector funding to further India’s economic development.

But many in rural India see the policy as snatching their land and others fear it will fuel an influx of migrant workers.

Bibek Debroy, an economist and professor at a New Delhi-based think-tank, in an interview said the government was going about its development policy the wrong way.

“First, I should say, I don’t believe in SEZs. We did experiment with them 15 or 20 years ago, but they didn’t work,” he said.

For Debroy, the SEZs mask the real issue “urbanisation”, a sensitive subject in India, where more than half of the country is arable land.

“Fundamentally it’s about the conversion of agricultural land to land for manufacturing purposes. That transfer … is needed for economic growth, but obviously you have to have adequate compensation first.

“There is also a lack of transparency. The entire decision-making process has been non-transparent and that has fueled some of the objections.”

Those who object have been highly vocal about it.

In a 2006 report on India’s economic development, the IMF questioned the government’s policy and said of SEZs overall: “International experience with tax incentives, which exist in virtually all SEZs worldwide, are mixed.”

With India’s economic growth predicted at close to nine per cent in 2008, the government will have to tackle the issue.

According to management consultancy Frost & Sullivan, which has a strong presence in India, the problem lies with those who would take advantage of a relatively sound policy.

Its research showed that SEZs started well, with many people investing, but that some elements wanted to take undue advantage.

“Land is at a huge premium,” the firm said from Mumbai, adding that some developers “are buying the land up at a throwaway price from the government, and that’s really the issue”.

“Going forward things have to take a different route.”

Source: Aljazeera

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