General Awareness

April 04, 2017 @ 01:15 PM

Special Economic Zone-Tug of war between merits and demerits of SEZ

A Special Economic Zone (SEZ) is a special geographical region of a country where in the economic laws are more liberal than the typical economic laws outside the region. SEZ are exclusive geographical region fully equipped with world class facilities of Roadways, transport, electricity supply and many other facilities satisfying the needs of industrial area. Usually the goal of establishing a SEZ is to increase the foreign direct investment (FDI) by tempting the foreign investors with certain benefits. 

The first Special Economic Zone was established in People’s Republic of China in 1980. This ESZ was established by the central government of China under the leadership of Deng Xiaoping. Shenzhen, the most successful SEZ has developed from a village to glittering city accommodating a population over 10 million within 20 years. Following the People’s Republic of China, Special Economic Zones have been established by various other countries throughout the world. 
India was first country in Asia to establish an Export Processing Zone (EPZ) in 1965 at Kandla. But the concept of EPZ had many shortcomings. To sort-out those short comings and considering the need to enhance foreign direct investment, Government of India in April 2000 announced the introduction of SEZ in the country. Since then there have been so many debates in India over the merits and demerits of SEZ.
Facts supporting SEZ states that establishing SEZs is good as far as growth and development are concerned. SEZ definitely attracts the FDI and leads to setting up of MNC, which in turn generates job opportunities, increases the living standard of employees and also leads to the development of rural areas as they are mostly established in such areas where excess land is available.
Yet there are many disadvantages of SEZ too which can’t be overlooked. Firstly, for setting up SEZ vast piece of land is required. When such land acquisitions take place the farmers suffer the most. Their farmlands are acquired by the government, which in return pay a very negligible amount of money and hence the farmers get pushed towards poverty and unemployment as they don’t know other means of livelihood.
The Nandigram incidence is a very famous controversy over SEZs in past. Nandigram located 70km south-west of Kolkata; is a rural area of Purba Medinipur district of West Bengal. In 2007, when the government of Bengal decided to allow Salim Group to set up a chemical hub at Nandigram under SEZ policy, the farmers and villagers of Nandigram stood against it. More than 3,000 heavily armed Police stormed against the protestors to evacuate the area, resulting in 14 villagers shot dead, and 70 more wounded.  
Indeed the SEZs create employment, but the employment is constrained to only the literate masses. The illiterate people continue to suffer. The job offered to such people involves forced overtime, exhausting work schedule, less pay and unhealthy working conditions. Majority of women workers in such SEZs are prone to sexual abuse too. 
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