Enthused by the success of the Chinese experiment with SEZs, we deliberated upon them, debated on their pros and cons for a couple of years, and finally decided to put in place an appropriate law for establishing SEZs 15 years after we started the liberalization process—which is, of course, in stark contrast with China, which started its liberalization with the establishment of SEZs. And, thus began all our woes. As a race, being highly possessive of the `sovereignty of reason', we—`pregnant' with `thoughts' that are `disjoint and out of prime'—took to the fancy of `reasoning out' the good and bad of SEZs—whose capability to develop agglomeration economies, to make socio-political control of foreign involvement easier, and create better infrastructure and links with the external world, has been proved beyond doubt in China and elsewhere —and have become perplexed by the problems it has created. The net result is pandemonium across the country.
Reacting to the violence and police firings, the empowered group of ministers has come up with revised policy guidelines: one, the size of multi-product SEZs is caped at 5,000 hectares; two, state governments will not acquire land for SEZs; three, at least, half the area of the SEZ should be earmarked for processing unit; and four, SEZs cannot merely be net foreign exchange earners but their exports must equal their purchases from the domestic tariff areas. |
