Saturday, January 27, 2007

Zone of conflict

Previously we discussed how government promotes Special Economic Zone to maximize the profit of MNCs and comprador capitalists. Mumbai SEZ is part of that ongoing programme. The following article published in Frontline discussed this particular SEZ in detail.

Zone of conflict

in Mumbai

The Maha Mumbai Special Economic Zone project of Reliance faces resistance from residents of villages which may be acquired for it.

CHIRNER village has a history of resistance. On September 25, 1930, local people staged a "jungle satyagraha" here against the British when they were denied their right to collect firewood. Nine people were killed in police firing, including a mamlatdar (district official) who refused to give orders to fire. Dr. B.R. Ambedkar fought the case for the satyagrahis.

Once again, Chirner is witnessing a fight. But this time, the residents are not confronting the British empire. They are fighting against an Indian company - Mukesh Dhirubhai Ambani's Reliance Industries Limited.

What the company wants to set up is not very different from the East India Company's trading zones. Reliance wants to develop a Special Economic Zone (SEZ) in Chirner. An SEZ is an enclave where no taxes are collected, there are no labour laws and there is no local government - on land taken for a pittance. That is the Maha Mumbai SEZ project.

It will be Mumbai's satellite city spread over 35,000 acres (1 acre is 0.4 hectare) - one-third the size of the metropolis. Since the government has cleared Reliance's request for it to be the special planning authority, the company will have complete control over the development of the entire area. With land prices shooting up, undeveloped areas outside the city are the next big booty for real estate developers. Before anyone could lay their hands on it, Reliance has gobbled up the entire stretch from Navi Mumbai to Dharamtar creek. And the government is acting as its real estate agent. It will acquire 45 villages for the Reliance project.

"Money comes and goes. Land never leaves a person's hand. That's why we won't let them take our land. We are self-sufficient," says Praful Kharpatil, a local leader. "It won't create employment for us. The SEZ will employ only highly educated people. They will make us security guards or peons, and won't let us enter the gates. After all the development that has already taken place here, graduates are working as loaders in the Jawaharlal Nehru Port Trust (JNPT) container warehouses. So isn't it better to have your own land?"

The government has issued notifications for land acquisition. But people have no clue how much they will get for their land. Reliance has been trying to buy up land at Rs.3 lakhs to Rs.4 lakhs an acre (0.40 hectares), without much luck. So local hearsay is that they will not pay a penny more while getting the government to acquire the land. The market rate is anywhere between Rs.20 lakhs and Rs.40 lakhs an acre, depending on the location and quality of the land. Reliance just bought 450 hectares of undeveloped land at Rs.26 lakhs to Rs.40 lakhs an acre in Navi Mumbai from the City Industrial Development Corporation (CIDCO). Some parts of the failed satellite township that CIDCO planned in Navi Mumbai will also be part of the SEZ.

"Why should we sell for less? Let them pay the market rate. The land value will soon be much higher than even Rs.40 lakh when the new airport is built here and the Nhava Sheva-Sewri bridge will make it only a 30-minute drive into central Mumbai," said D.K. Patil, executive president of the Maha Mumbai Shetkari Sangharsh Samiti, a coalition of several groups that has been formed to challenge unfair land acquisitions. The value of land here is high also because of its proximity to the JNPT port.

District officials say that local market rates are only Rs.1.28 lakhs an acre for agricultural land and Rs.10.32 lakhs for non-agricultural land - a gross underestimation. The government will decide the rate later. It will take a year before it announces the guidelines and the rate at which property will be acquired, said D.S. Jhagade, the District Collector of Raigad. The land acquisition law also says that while fixing compensation the state must take into consideration the value of the land after it is developed, but this is not being considered. This time, Reliance has chosen to operate outside the market. Companies that swear by `market forces' run back to the state for subsidies and concessions.

The process of acquiring land as laid out in the outdated Land Acquisition Act, 1894, is illogical. Once the notification is issued, public objections are invited and after they are heard, the government decides on the compensation package. But how can people accept or reject land acquisition until they know what deal they are going to get? On what basis can they file objections without knowing what price is offered to them? "We are not against development. But what kind? We haven't been told anything. If they are truly interested in giving us a fair deal, whey don't they sit across the table and talk to us?" D.K. Patil said.

"It's up to the government to acquire the land, so they will negotiate," explained Dilip Chaware, spokesperson for the Maha Mumbai SEZ project. "Village homes in the gaothan (residential) areas will not be acquired, only the farm lands. People will get all the benefits of better infrastructure. We will train the youth for job skills. They can grow with the SEZ. Anyway, the land is not productive and people were not employed," he said.

SEZs are being hyped as our pathway to prosperity. Maha Mumbai is supposed to be the largest private SEZ in the world. "The company would not have been able to buy such a large chunk of land in the open market, so the government had to acquire the land for them. This is what happens when planners are more excited about a project than people," said a government official.

Most of those whose land will be acquired are Agris and Kolis, traditional farmers and fisherfolk. "We were ousted from Mumbai and Navi Mumbai. Where are we to go? Can you see us anywhere in this picture?" asked D.K. Patil, pointing to the glossy SEZ brochure cover with skyscrapers, an airplane and a golfer. "We won't get jobs here. There's an Agri saying: Mumbai tumchi, Bhaandi ghasa aamchi [Mumbai is yours, but you will wash our dishes]. That's all they will make us do."

After learning the hard way through the CIDCO acquisitions, the local people are demanding more than just a job assurance. "We should get a share in the business. We don't want to be serving but owning businesses. They can train us to manage businesses like warehousing on our properties," said Jeevan Gavan, a Zilla Parishad member from Uran. Others are asking for a share of Reliance's lease rent or shares in the company so that they have a source of regular income.

In the 1980s, CIDCO acquired land from 95 villages displacing about 30,000 families to develop Navi Mumbai. Then too, villagers fought for a better deal. After an agitation in which two persons were killed in police firing, the government agreed to increase the rate from Rs.15,000 an acre to Rs.30,000, and agreed to return 12.5 per cent of the developed land back to the owner. It also promised jobs to every family.

"The state didn't deliver on any of its assurances. We got only Rs.15,000. Very few got jobs. They didn't give back 12.5 per cent of the land. They had also promised salt-pan workers 40 square metres. We are still fighting for that land. They have left us as beggars," said Dharma Patil (69), a salt worker from Agroli village in Navi Mumbai.

There were not as many takers for the Navi Mumbai project as was expected. Several plots of land were lying unused. That is why CIDCO has sold a lot of it to Reliance and has become a 26 per cent partner in the Navi Mumbai part of the SEZ. "We want industry but not without labour laws or job security. We don't want bonded labour," says Sanjay Thakur, a leader of the Communist Party of India (Marxist).

An SEZ is a duty-free enclave considered foreign territory for trade and financial purposes. If you buy goods from an SEZ, you have to pay import duties. Under the newly formed SEZ Act, companies in the zone are granted huge concessions in customs duties, sales tax and even income tax. Mukesh Ambani has even got the permission to be the special planning authority for the SEZ. His company will plan the development and create infrastructure for the area, including water and power supply. There will be no local government. A development commissioner will govern it.

"It will be a new city, not just an SEZ, and will generate 25 lakh jobs," Chaware claimed. "There will be one million residents and exports are estimated at $15 billion in 10 years. We are investing $5 million in infrastructure, including a dam and a power plant." The government has cleared 26 SEZs across the country, hoping to emulate those in China. At present there are eight SEZs functioning in India.

But neither Reliance nor the government was willing to give any cost-benefit analysis of the project. What are the costs and losses - economic, social and environmental? Are the gains worth it?

An internal assessment of the Finance Ministry has estimated that the country will forgo about Rs.90,000 crores in direct and indirect taxes over the next four years because of the SEZs across the country.

A large part of this loss is because export units that are now paying tax will shift to these areas ("Why the SEZ policy needs a rethink", The Hindu Business Line, May 26). Many wonder whether the pipedreams will actually translate into large-scale investment or is it just a real estate grab? The SEZ model is now being questioned even in China because it creates huge economic disparities rather than broad-based development.

That is the brand of `progress' that the people of Chirner are also challenging. "Our vegetables and fruits get the best price in the market. Why should we sell our land?" asks Kharpatil. "We fought the British. Now we will fight our own government." Chirner village is preparing for round two.


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