SEZ - The Logical Way

We have seen the deeply polarizing effects of SEZs or Special Economic Zones. These are usually set up on agricultural land by governments so that other industries can move in and enjoy tax and other benefits. The idea is borrowed from the success seen by these SEZs in China among a few other countries.

I have always felt that politicians who go about promoting SEZs look a bit foolish. They are in effect admitting to their lack of influence over their administration, needing to set aside a small part so they can provide the services to business they should be able to anywhere.

While the involvement of politicians naturally politicizes the issue of SEZs, the idea of SEZs also naturally attracts politicians. With huge amounts of money at stake and lots of people involved, it is not surprising that politicians are drawn to SEZ issues as sharks are to blood.

Between money, power and rhetoric (pro business or pro farmer) no SEZ has seen a peaceful start. Until now.

A group of farmers led by a local has decided to set up their own SEZ in Avasari Khurd village near Pune, Maharashtra without any involvement from the government. The person leading the effort is affiliated with the Congress, but thankfully doesn't seem to be a career politician. Most residents of the village are shareholders in Avasari Khurd Industrial Development Pvt. Ltd. in proportion to how much land they gave up. There is a socialist twist here in that landless residents are also given shares for a cash investment.

I have long believed that governments should get out of the business of acquiring land for SEZs - or any other purpose for that matter and that includes factories, highways, airports etc. Let the market do what it does best, and people are smart (and opportunistic) enough to take advantage of what they have. If this SEZ takes off, everyone is the winner - the companies which get concessions, the local economy for employment, and the farmers who get all the returns from their investment. More importantly, there are no losers.

It is interesting to note that there has been very little opposition to the plan in the village. This makes sense given the prospects for agriculture in some parts of our country. I sincerely hope petty politics that our villages are riven with doesn't torpedo this whole idea.

No development is sustainable unless the vast majority of people are bought into it. The Co-operative movement in India didn't take off because it was an inherently socialist model. Individual people are capitalists - and the villagers of Avasari Khurd probably have shown a way for the rural Indian to play in this new game in a uniquely Indian way.