Critical analysis of Special Economic Zone 

SEZ ACT 2005 in India and Anti SEZ Movements

The government of India has made several foreign trade policies and schemes to encourage export-oriented production. They serve as means to bypass fiscal policy of the nation and attract Foreign Direct Investment (FDI). The most recent of the schemes is the Special Economic Zone (SEZ), a duty-free territory with separately developed industrial infrastructure. Other schemes include the Export Processing Zone (EPZ) and Software Technology Park (STP), both of which are designed an Export-Oriented Unit (EOU). All of these schemes are governed by separate rules and granted different benefits. (SP Mathiraj: 2015)

Special Economic Zone (SEZ) is a specifically designated, duty-free area deemed to be foreign territory for the purposes of trade operations and duties and tariffs. Such geographical region has economic laws different from a country's typical economic laws for the increase of FDI. SEZs have been established in several countries, including Latin America, Africa, China, India, Jordan, Poland, Kazakhstan, Philippines and Russia.  SEZs are located within a country's national borders, and their aims include increasing trade balance, employment, increased investment and effective administration. To encourage businesses to set up in the zone, financial policies are introduced. These policies typically encompass investing, taxation, trading, quotas, customs and labour legislations. (Avishek Topno:2005)

World Bank defines SEZ as “Geographically limited area, usually physically secured (fenced-in); single management or administration; eligibility for benefits based upon physical location within the zone; separate customs area (duty-free benefits) and streamlined procedures." (Worldbank:2008)

The main objectives of SEZ are to enhance foreign investment, increase exports, create jobs and promote regional development. The other objectives of the SEZ are:

  • Generation of additional economic activity;
  • Promotion of exports of goods and services
  • Promotion of investment from domestic and foreign sources
  • Creation of employment of opportunities
  • Development of infrastructure facilities. (SP Mathiraj:2015)
  • Exemption from custom duty on import of capital goods, consumable spares etc.
  • Exemption from central excise duty and service tax.
  • No license required for import
  • Supplies from Domestic Tariff Areas to SEZ units treated as deemed exports.
  • Reimbursement of central sales tax paid on domestic purchases
  • 100% income tax exemption for a block period of 5 years, 50% tax exemption for next five years under section 10AA of the income tax Act.
  • Facilities in the SEZs may retain 100% foreign exchange receipts in exchange earner’s foreign current accounts.
  • 100% foreign direct investment (FDI) is permitted for SEZ franchisees in providing basic telephone service in SEZs.
  • No cap on foreign investment for small scale sector reserved items which are otherwise restricted.
  • Exemption from industrial licensing requirements for items reserved for the small-scale industries sector.
  • Facility to realize and repatriate export proceeds with 12 months.
  • Profits allowed to be repatriated without any dividend-balancing requirement.
  •  Exemption from Labour Laws. (SP Mathiraj:2015)

The Term Special Economic Zone includes the following: 

  • Free Trade Zones (FTZ)
  • Export Processing zone (EPZ)
  • Free Zone/Free Economical Zone (FZ/FEZ)
  • Industrial Parks / Industrial Estates 
  • Free Ports
  • Bonded Logisticks Parks (BPL)
  • Urban Enterprise Zones (UEZ) (Masaey S:2019)

Special Economic Zone Act 2005

In May 2005, the government of India passed new regulation called the “Special Economic Zones (SEZ) bill 2005” approving its obligation to a long- term and stable policy for the SEZ structure which had been only an administrative construct previously. In addition to tax breaks, the law provides a one-stop clearance and approval mechanism for setting up SEZ units. SEZs are regarded as foreign territory for the purpose of duties and taxes, and operate outside the sphere of the custom authorities. SEZ units are allowed to retain 100 percent of their foreign exchange earnings in special export earners foreign currency accounts. They are free to sell goods in the Domestic Tariff Area (DTA) on payment of applicable duties. Sales from DTA firms to SEZ units are on par with regular trade transactions and hence eligible to benefit from all export incentive and foreign currency exemption scheme. In addition, many state governments have granted a sales-tax exemption for DTA-SEZ sales. SEZ units are also exempt from the central government service and excise tax regimes. SEZ businesses are expected to be a positive foreign exchange earner within five years from the commencement of production. (SP Mathiraj:2015)

India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965. With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances; absence of world-class infrastructure, and an unstable fiscal regime and with a view to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April 2000. (Ministry of Commerce & Industry:2018)

This policy intended to make SEZs an engine for economic growth supported by quality infrastructure complemented by an attractive fiscal package, both at the Centre and the State level, with the minimum possible regulations. SEZs in India functioned from 1.11.2000 to 09.02.2006 under the provisions of the Foreign Trade Policy and fiscal incentives were made effective through the provisions of relevant statutes. (Ministry of Commerce & Industry:2018)

To instil confidence in investors and signal the Government's commitment to a stable SEZ policy regime and with a view to impart stability to the SEZ regime, a comprehensive draft SEZ Bill prepared after extensive discussions with the stakeholders. A number of meetings were held in various parts of the country both by the Minister for Commerce and Industry as well as senior officials for this purpose. The Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 which received Presidential assent on the 23rd of June, 2005. The draft SEZ Rules were widely discussed and put on the website of the Department of Commerce offering suggestions/comments. Around 800 suggestions were received on the draft rules. After extensive consultations, the SEZ Act, 2005, supported by SEZ Rules, came into effect on 10th February, 2006, providing for drastic simplification of procedures and for single window clearance on matters relating to central as well as state governments. (Ministry of Commerce & Industry:2018)

The main objectives of the SEZ Act are:

  • Generation of additional economic activity
  • Promotion of exports of goods and services
  • Promotion of investment from domestic and foreign sources
  • Creation of employment opportunities
  • Development of infrastructure facilities

The functioning of the SEZs is governed by a three- tier administrative set up. The Board of Approval is the apex body and is headed by the Secretary, Department of Commerce. The Approval Committee at the Zone level deals with approval of units in the SEZs and other related issues. Each Zone is headed by a Development Commissioner, who is ex-officio chairperson of the Approval Committee. (Ministry of Commerce & Industry:2018)

  • Establishment of SEZ and setting up of units including requirements, obligations and entitlements. 
  • Requirements for setting up of Off shore banking units and units in International financial service centre in SEZ, including fiscal regime governing the operation of such units. 
  • The fiscal regime for developers of SEZ and Units set up therein
  • Single window clearance mechanism at the zonal level.
  • Establishment of an authority for each SEZ set up by the central government to impart greater administrative autonomy 
  • Designation of special courts and single enforcement agency to ensure speedy trial and investigation of notified offences committed in SEZ. (Mohan Brao:2021)

The SEZ Act consists of 58 sections divided into VIII chapters and three Schedules

  • Chapter 1 - enlists the definitions of the several terms used in the act like SEZ. 
  • Chapter2 - the process of setting up of SEZ, functioning of SEZ and benefits enjoyed bythe developers and functioning units of SEZs
  • Chapter 3 – constitution of board of approval
  • Chapter 4 – functions of development commissioner
  • Chapter 5 – Special benefits to the developers like single window clearance.

Facilities and Incentives for Developers

  • Developer of SEZ may import procure goods without payment of duty for the development, operation and maintenance of SEZ 
  • Income tax exemption for a black period of 10 year in 15 years of under section 80IAB of the income tax Act.
  • Full freedom in allocation of developed plots to approved SEZ units on a purely commercial basis.  
  • Full authority to provide service like water, electricity, security, restaurants, recreation centres etc.  
  • Foreign investment permitted to develop township within the SEZ with residential area, market, play grounds, clubs, recreation etc. 
  • Develop stranded design factory (SDF) building in existing SEZ
  • Income tax exemption to investor’s in SEZs under section 10(23G) of income tax Act.  
  • Exemption from service tax. (SP Mathiraj:2015)

Amendment Made from 2005 – 2022

The SEZ Act 2005 further amended the country’s SEZ policy. Many EPZs were converted to SEZs, with notable zones in Noida (Uttar Pradesh), Falta (West Bengal) Visakhapatnam (Andhra Pradesh), Chennai (Tamil Nadu), Cochin (Kerala), Santa Cruz (Maharashtra), Indore (Madhya Pradesh), as well as Kandla and Surat (Gujarat). Since the Act’s promulgation, the Indian government has also accepted proposals for additional, far smaller SEZs, which must be proposed by developers to the Indian Board of Approval. The SEZ rules,2006 lay down the complete procedure to develop a proposed SEZ or establish a unit in an SEZ. (Desan Shira & Associates: 2021)

Number of Formal Approvals

425

Number of Notified SEZs

376

Number of In-Principal Approvals

35

Operational SEZs

268 (25 are multi product SEZs, remaining are sector specific SEZs)

Units approved in SEZs

5604

Source: Desan Shira & Associates: 2021

The Special Economic Zones Amendment Act 2019 No. 8 of 2019 6th. July 2019

    • 1. (1) This Act may be called the Special Economic Zones (Amendment) Act, 2019. 

    • 1. (2) It shall be deemed to have come into force on the 2nd day of March, 2019
    • (2) In section 2 of the Special Economic Zones Act, 2005, in clause (v)
    • 2(i) after the words "local authority", the words ", trust or any entity as may be notified by the Central Government" shall be inserted
    • 2(ii) for the words "authority or company", the words "authority, company, trust or entity" shall be substituted.
    • 3(1) The Special Economic Zones (Amendment) Ordinance, 2019 is hereby repealed.
    • 3(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance shall be deemed to have been done or taken under this Act. (Narayana Raju G.: 2019)

    Locations of various SEZ Projects in India

    The category 'SEZ' covers a broad range of more specific zone types, including Free Trade Zones (FTZ), Export Processing Zones (EPZ), Free Zones (FZ), Industrial Estates (IE), Free ports, Urban Enterprise Zones and others. Usually, the goal of a structure is to increase foreign direct investment by foreign investors, typically an international business or a Multi-National Corporations (MNC).


    The first zone was set up in Kandla as early as 1965. It was followed by the Santacruz export processing zone which came into operation in 1973. The government set up five more during the late 1980. These were at Cochin (Kerala), Kandla and Surat (Gujarat), Chennai (Tamilnadu), Visakhapatnam (Andhra Pradesh) Falta(West Bengal) Noida (Uttar Pradesh) Indore (Madhya Pradesh) in addition 18 approvals have been given for setting up of SEZ at Positra (Gujarat) Navi Mumbai and khopta (Maharashtra), Nanguneri (Tamil Nadu) Kulpi and Salt Lake (West Bengal), Paradeep and Gopalpur (Orissa), Bhadohi, Kanpur, Moradabad and Greater Noida ( Uttar Pradesh), Vishakhapatnam and Kakinada (Andhra Pradesh), Vallarpadam (Kerala), Hassan (Karnataka), Jaipur and Jodhpur (Rajasthan) on the basis of proposal received from the state governments. (Avishek Topno:2005)


    Surat EPZ became operational in 1998. The EXIM policy, 2000 launched a new scheme of special economic zones (SEZs). India is now promoting EPZ program much more dynamically than in the first phases of their evolution. Huge amounts of public resources are being invested in the zones. SEZ in India was announced by the government in march 2000. To provide a stable economic environment for the promotion of export-import of goods in a quick efficient and hassle-free manner, government of India enacted the SEZ act, which received the assent of the president of India on 2005. The SEZ Act and SEZ Rules, 2006 were notified on Feb 10, 2006. (SP Mathiraj:2015) 

    Total number of Operational SEZ in India: 

    • Kerala - 48
    • Tamil Nadu - 40
    • Karnataka - 32
    • Maharashtra - 31
    • Telangana - 30
    • Andhra Pradesh - 20
    • Gujarat - 20
    • UP -13
    • West Bengal - 7
    • Haryana -7
    • Odisha – 5 
    image

    (Desan Shira & Associates: 2021) 

    Some Important SEZ in India

    • MEPZ SEZ – Madras Export Processing Zone SEZ (Chennai, Tamil Nadu);
    • Cochin SEZ (Kerala)
    • Noida SEZ (Uttar Pradesh
    • Kandla SEZ (Gujarat)
    • Visakhapatnam SEZ (Andhra Pradesh);
    • SEEPZ SEZ – Santacruz Electronic Export Processing Zone SEZ (Mumbai, Maharashtra);
    • Falta SEZ (West Bengal). (Ministry of Commerce & Industry: 2018)

    Navi Mumbai SEZ

    The Navi Mumbai Special Economic Zone is located in the satellite township near Mumbai known as Navi Mumbai in the state of Maharashtra. NMSEZ is regarded to be the best SEZ in India. The nearness of the Navi Mumbai Special Economic Zone (NMSEZ) to the national and international transportation system is one of the major strengths of this SEZ. The NMSEZ also has the Chhatrapati Shivaji International Airport for airfreight, which is just an hour and a half drive from the special economic zone. The NMSEZ is also linked with the other parts of the country by a network of National Highways such as NH3, NH4, NH8, NH9 and NH17. The Navi Mumbai Special Economic Zone is situated near to the Jawaharlal Nehru Port Trust, which is the biggest and the most advanced sea port in India. 

    • The provision of a fully developed transportation system including wide main roads and services roads that would connect the different manufacturing units. The system of transportation would also cater to the heavy commercial vehicle traffic required by some of the manufacturing units.
    • The choice pertaining to the type of facility the manufacturing unit requires, such as well-built and equipped office space, technologically equipped state of the art factories, plotted lands with proper transportation facilities.
    • The power supplied would be continuous as it would be supplied directly from the grid and the area of the special economic zone would also have a back-up power supply facility in case shut downs.
    • The supply of water would be abundant in the area of the special economic zone. A well-connected network of waterlines and water pump stations would provide continuous supply of water.
    • The sewer water and solid waste removal would be very less as most of the industries would be pollution free, but still there would be treatment units for sewer water and solid waste including trucks, tankers, dumpers for waste disposal.
    • Water treatment and sewerage units would be built within the area of the special economic zone.
    Critical Analysis of SEZ

    Since 2005, exports from the country have increased substantially, largely due to the rise in sourcing and manufacturing platforms. According to the Ministry of Commerce and Industry:

    • SEZ exports have increased from INR 22,840 crores (US$3.07 billion) in 2005-06 to INR 7,59,524 Crores (US$102.24 billion) in 2020-21.
    • Investment in SEZs have increased from INR 4,035.51 Crores (US$0.54 billion) in 2005-06 to INR 6,17,499 Crores (US$83.12 billion) (cumulative basis) by 2020-21.
    • Operations in SEZ units provided jobs to 134,704 persons in 2005-06 – which increased to 23,58,136 persons (cumulative basis) by 2020-21.
    • SEZ is an effort to respond to the economy of the country which is fully dependent upon agriculture which is often faced with failure of monsoons and recurring debts. It tries to increase the national income through export and gain foreign direct investment.
    • It can increase employment opportunity towards increase on per capita income. The standard of living can be improved with global market and lifestyle of international standard through production, export, distribution and consumption. Exchange of products at the global market is possible.
    Challenges from SEZ
    • The land designated for the special economic zone is often forcibly taken away from the rural villagers, farmers, fishermen and tribals for whom land, forest and sea is the only source of livelihood. This is the blow for the working class and poor rural population.
    • Revenue losses for the central Government and state governments because of the various tax exemptions and incentives.
    • Many traders are interested in SEZ, so that they can acquire at cheap rates and create a land bank for themselves.
    • No strikes would be allowed in such companies without giving the employer 6 weeks prior notice in addition to the other conditions mentioned in the Industrial Disputes Act, 1947.
    • No routine examination by Customs officials of export and import cargo
    • OBU's allowed 100% income tax exemption on profit earned for three years and 50 % for next two years.
    • 15 years corporate tax holiday on export profit – 100% for initial 5 years, 50% for the next 5 years and up to 50% for the balance 5 years equivalent to profits ploughed back for investment.
    • Exemption from the Goods and Services Tax (GST) and levies imposed by state government
    • Exemption in electricity duty and tax on sale of electricity by certain states in India;
    • Since SEZs offer a wide range of incentives and tax benefits, it is believed that many existing domestic firms may just shift base to SEZs.
    • There is a fear that the promotion of SEZs may be at the cost of fertile agricultural land affecting food security, loss of revenue to the exchequer and cause uneven growth with adverse effects.
    • Apart from food security, water security is also affected because of the diversion of water use for SEZs.
    • SEZs also cause pollution, especially with the release of untreated effluents. There has been a huge destruction of mangroves in Gujarat affecting fisheries and dairy sectors.
    • SEZs have to be promoted but not at the cost of the agricultural sector of the country. It should also not affect the environment adversely.
    • SEZ is an exploitation of land, natural resources, water and human labour for either cheaper rate or no cost at all in the name of economic growth with global market. The raw materials, minerals, water, electricity are used without any tax, tariff and duties for the production and export. The profit also is allowed to use for further production.

    Foreseen Dangers by the Farmer Leaders and Anti-SEZ Activists 

    • Only half the acquired land would be utilized for industrial purposes (ostensible reason behind declaring the area an SEZ). The rest would be used to build golf clubs, holiday homes, hotels and other recreational facilities.
    • The SEZ area would be treated as a foreign territory to villagers. Villagers would have to produce identity cards in the manner of passports to enter their own villages.
    • The Gram Panchayats, the local village level self-government would no longer have any rights over the village’s natural resources.
    • No impact assessment of how the project would affect the local environment—physical and socio-economic— would be done.
    • The SEZ area would be exempt from all labour laws.

    Further, farmers learnt about the effects of the SEZ policy on the agriculture sector. The agricultural sector, mainstay of 65% of the country’s population, faced unwelcome changes. These included reduction in subsidies and introduction of ‘contract farming’, which would take farming out of the hands of farmers and give them to business interests. 

    Additionally, with only half the acquired land to be used for industry and the rest for luxury residences l and recreational facilities this would benefit the builder lobby. The company would only incur a one-time cost of acquiring land, recoverable through the tax exemptions, subsidies and other sops handed out by the state.

    The evident emphasis of the state was on promoting and developing industry and urbanisation at great detriment to agriculture.  

    Anti SEZ movements in Raigad By Dr. Vashali Patil

    In April 2005, the state government issued notices in Raigad newspapers for acquisition of land. It announced its intention to acquire land to set up an SEZ. The notices led to a debate on the SEZ by farmers, media and business man. More than 80% of Raigad’s farmers hold small and marginal lands and unrecorded tenants are the most vulnerable. In June 2005, the farmers in a spontaneous reaction organized a protest march in Pen to demand (the promised) irrigation water from the Hetawane dam. 5000 strong farmers group questioned the government’s Land Acquisition Officer on reasons given by the government for taking over their land. A strong police force prevented them from entering the office. As the crowd grew aggressive and began pushing the closed doors of the office, police dispersed the crowd through lathi charge and teargas. Farmer activists, along with more than 32 agitators were booked under non-bailable offences. Sixteen agitators that included three women were held in jail for nineteen days. Around this time NCAS organized a consultation on the SEZ Act. Eminent social activists, scientists and lawyers were invited to analyse and discuss the Act, in which farmer representatives from Pen Block participated. (Dr. Vaishali Patil:2021)


    The government’s land acquisition for MMSEZ was viewed in the context of the district’s historical struggle to retain its right to land. This was the first time that the state was acquiring a huge tract of land for the private sector. Farmers and activists recognised and realised that the project would appropriate their natural resources, especially land and water, destroy their traditional livelihoods; and most importantly would benefit not the people but Reliance industries alone. The leaders became resolute in not wanting to part with their land and natural resources. (Dr. Vaishali patil:2021)


    Soon, a small band of knowledgeable, dedicated and active farmers came together on the issue recognising the need for collective action. A tribal group, from mangaon block performed a street play on the issue in all the project-area villages. The play would be followed by discussions on the proposed SEZ. At this time, land agents appointed by Ambani’s Reliance company began issuing threats to the activists, asking them to discontinue the campaign. The activists learnt that a number of unemployed youths, village level government representatives and key members in some villages were in the pay of the company. They opposed the anti-SEZ campaign and spread misinformation about it. (Dr. Vaishali Patil:2021)


    At the block level, NGOs and activists formed a forum Jagtikikaran Virodhi Kruti Samithi (JVKS) (Forum against Globalization). Representatives of no political party other than the PWP found space in this forum. Later, different political parties came together and formed the Chauvis Gaon SEZ Virodhi Shetkari Sangarsh Samithi (the 42 villages coalition against the SEZ project) or the CGSVSSS under the leadership of Mr Subhash Mhatre, a project affected person and Tehsildar of the state’s revenue department. Representatives from the political parties of Shiv Sena, Congress and NCP were included in this committee along with PWP.  A similar forum to oppose the project, the Maha Mumbai SEZ Virodhi Sangarsh Samithi (MMSVSS) was also formed at the district level by a lawyers group, under the leadership of former opposition leader in the assembly, Advocate Datta Patil. The other members of the forum were P.B. Sawant, former Chief Justice of the Bombay High Court, B.G. Kolse Patil former judge of Bombay High Court and senior social activist Vilas Sonawane. This group which is active in the Uran and Panvel blocks, filed a PIL and Ambani was disallowed extension of time limit towards acquiring land. (Dr. Vaishali patil:2021)


    PWP organized a massive protest march to the Divisional Commissioner office at Konkan Bhavan, Navi Mumbai to address compulsory land acquisition by the government. On July 27 2007 more than 30,000 farmers walked in protest against the forceful land acquisition by the government. The State Chief Minister made a declaration that no land would be forcefully acquired against the wishes of the people. However, despite the Chief Minister’s assurance, the land acquisition process continued in the absence of any written official order or notification. As an appropriate counter-move, activists demanded a SAZ or Special Agricultural Zone to promote agriculture. In such a zone, increased irrigation could be used to develop horticulture, and fishing augmented and exported. The activists decided to continue their protest until the government stopped acquiring land. In order to galvanize the villagers and exert pressure on the state government it was decided to build village level organizations. It was further planned that villages would take part in chain fasts. Each village fasted for a day, followed by another village the next day.  This went on for an entire month in Pen block. The responsibility of organizing, motivating and guiding farmers was with the local village leaders. (Dr. Vaishali Patil:2021)

    Indefinite Fast against SEZ and Role of Women

    CGSVSSS decided on launching an indefinite fast. On 17th July 2007 sixteen farmers, half of them women, went on an indefinite fast demanding the immediate stoppage of the acquisition process and exclusion of irrigated areas from the project. The fasting was organized in front of the office of Tehsildar in Pen which went on for seven continuous days. During this period a large number of organizations, civil society groups, leaders of various unions and individuals lent support to the farmer’s demands. Women from all the 24 villages in Pen were at the forefront of every fast and protest. The activists noted that women could be counted upon to be present at every village meeting, agitation, indefinite fast or public hearing. Women were the first to get arrested during the ‘Jail Bharo andolan’ (fill jails movement). They played an important role in thwarting the designs of land agents hired by the company.


    In July 2008, Prof. N.D. Patil and a representative of the farmers, Janardan Mhatre decided to go on an indefinite fast. Exactly one year after the Chief Minister’s promise of excluding irrigated lands from the project, Mr. Patil began his indefinite fast at Azad maidan, Mumbai. People from all over the state, including farmers, SEZ affected people, trade union members etc arrived in Mumbai in support of the fast. The PWP MLAs, joined by Shiv Sena MLAs demanded a discussion on the matter in the assembly house. On being refused, they staged a walkout from the assembly. In response, the government, particularly the Chief Minister was forced to make a statement on the issue. He declared in the assembly that the government would seek the farmers’ consent on the SEZ. A written order was passed to the Collector of Raigad, asking him to hold a referendum, asking landowning farmers in the project-marked area to vote on the proposed MMSEZ. The referendum was fixed for 21st September 2008. (Dr. Vaishali Patil:2021)

    Process of Referendum by Farmers of Raigad

    The referendum was conducted only in 22 villages of Pen block. The Collector appointed a polling officer at the government school in each village. Zonal officers were appointed for supervision, and the entire process was recorded on video. For nearly fifteen days prior to the referendum, activists carried out an intensive campaign in all the villages. The company offered each farmer Rs10,000 to vote in favour of the SEZ. The activists first compiled the list of eligible names for the referendum through the Right to Information act (RTI). Village committees, which had enthusiastically organised the chain fasts were now roped in to contact farmers individually. 

    They informed the farmers about the referendum and underscored its importance. It was emphasised how they could vote to decide their future. The voting process for the referendum went smoothly. CGSVSSS organized a press conference and declared the results. The results showed that 96% of the farmers had rejected the idea of SEZ and had asked instead for a SAZ. Farmers had demanded irrigation for their agricultural land as promised by the government. In a further development, the Maharashtra Government has proposed an SEZ state bill which is much worse that the central SEZ act. (Dr. Vaishali Patil:2021)

    Remarks of CAG on SEZ in Financial Audit

    A report on the Export Processing Zones by the Comptroller and Auditor General of India (CAG 1998): "Customs duty amounting to Rs 7500 crores was forgone for achieving net foreign exchange earnings of Rs 4700 crores and the government does not seem to have made any cost benefit analysis." In spite of this caustic comment, the Central Government, in the 1999-2000 Budget raised the corporate tax holiday period in EPZs from 5 to 10 years. (India together:2006)

    Judicial orders on NMSEZ

    In 2005 October 6, The High Court in its order had directed the State government that ''there shall be a total freeze on the destruction and cutting of mangroves in the entire State of Maharashtra. The Court orders also directed that all construction and rouble/garbage dumping on the mangrove areas shall be stopped forthwith. Further, the Court had instructed that regardless of the ownership of land, all construction taking place within 50 meters on all size of mangroves shall be forthwith stopped. The Court order also directed the State authorities that no development permission whatsoever shall be issued by any authority in the State of Maharashtra in respect of an area under the mangroves. ''In the event, if the company has not ordered any work, then you are hereby called upon to stop the earth filling work in progress, immediately, since the land is in your possession and you are required to protect the same as also responsible to ensure that no unauthorised work is carried out in the area in your possession,'' the CIDCO communication to NMSEZ authorities stated. (One India:2007)


    In 2018 September 17 Bombay High court has ordered the state Government to transfer all Mangroves for protection by the forest department but state government has not taken into consideration NMSEZ lands. It is feared that destruction of mangroves resulting into unseasonal floods and loss of fishing zones as well as paddy fields.


    Already revenue department has filed FIR against the NMSEZ companies for destruction of Mangroves at Pagote and Bhendkal. Mangrove committee has halted filling of mangroves at Pagote and Bhendkal ordering NMSEZ to restore the land but nothing has been restored from NMSEZ. (Vijay Singh: 2021) 


    The High Court-appointed Mangrove Protection and Conservation Committee has directed CIDCO to have five choke points at the wetland to allow free flow of tidal water. It is strongly advocated revocation of the lease of the Panje wetland from Navi Mumbai SEZ (NMSEZ) since the lease conditions of not harming the environment have been violated. Moreover, the Maharashtra Coastal Zone Management Authority (MCZMA) has itself categorised the area as CRZ-1. (G. Mohiuddin Jeddy:2021)

    Present Status of NMSEZ

    In December 2009, the two-year period allotted under the Land Acquisition Act lapsed and the project was de-facto scrapped. In 2011 January, Maharashtra government announced the scrapping of the MMSEZ project by declaring that ‘the Raigad farmers were free to utilise their lands as they deemed fit’. The 7/12 land extract was also de-notified against the lands, allowing farmers to trade their lands. The project was cancelled due to the company’s inability to acquire sufficient land in the two years designated period. This was entirely due to the strong protest campaign by the farmers. (Vaishali patil:2021)


    Mukesh Ambani-promoted Navi Mumbai SEZ Pvt Ltd had sought extension of the validity period of the formal approval, granted by the board for setting up IT/ITeS SEZ at Ulwe, Navi Mumbai, Maharashtra, beyond October 24, 2015. In 2016 Central Government has given permission to set up SEZ including Infosys and Cognizant. About 500 proposals for SEZs have been formally approved by the government, out of which over 200 are operational. (Economic Times:2016)


    While ignoring the Mangrove Committee orders, NMSEZ has begun to develop plots off the coastal road in Dronagiri. JNPT SEZ has levelled large stretches of lush-green mangrove zones into virtual desert lands and buried wetlands, The State Environment Department has already asked the Raigad District Coastal Zone Monitoring Committee to probe into previous complaints of mangrove destruction at Holding Pond 2 by CIDCO and at Dhutum and Belpada by JNPT. SEAP activist Nandakumar Pawar and Nat connect Foundation director B.N. Kumar argue that the reckless destruction of mangroves and wetlands is already causing floods in several villages in Uran/Dronagiri as the free flow tidal water flow has been interrupted with the water finding its own course. Villages with no-flood history are reeling under floods ever since NMSEZ and JNPT SEZ began their landfill. (Newsband:2021)


    Mukesh Ambani has bought 2,500 acres of Land in Pen area but the purchased land is scattered as the farmers have sold off part of their Land only. Hence Reliance is pressurising to capture the rest of the land from farmers and farmers face challenges from brokers and Reliance Ltd. (Vaishali patil:2021)

    Conclusion

    Rules are meant for humanity. Human beings are not meant for rules. Similarly Economic growth is meant for human development and welfare. No fool will sell off one’s own eyes to purchase a beautiful art.  Special economic zones enter the countries promising national income. The objective of SEZ is to create infrastructures but the corporate owners manipulate the infrastructure available from the Government and focus on production and export only.  These profit-oriented business bodies utilise land, natural resources and produce consumption goods at cost less rate in the name of economic growth. They also enjoy all tax and duties exemptions in the name of export and withhold the profit for themselves. CAG report of the Government shows the loss for the state due to investment on SEZ. Central and state Government provides land at very cheaper rates, builds up infra structure 

    Source: (i) MSW II - Vincent Vijayan

                (ii) Trust Pen - Ankur

    References 

      Avishek Topno 2005 What is Special Economic Zone? The Economic Times 

      Mohan Brao 2015 Special Economic Zones Act,2005. Legal Service India 

      G. Mohiuddin Jeddy 2021 High Court panel directs CIDCO to restore tidal water flow at Panje wetland 

      Narayana Raju G. 2019 The special Economic Zones Act, 2019 The Gazette of India 

      One India 2007 Navi Mumbai SEZ authorities accused of ciolating HC order 
      SP Mathiraj Subramanian, Saroja devi Rajendran 2015 SEZ in India: Concept of objectives  and Strategy 
      Ministry of Commerce & Industry 2018 Special Economic Zones in India 
      The Economic Times Jan 13 2016 Govt. gives more time to 13 SEZ to implement projects 
      Vijay Singh 2021 Navi Mumbai: CM Uddhav Thackeray asks forest secretary to inquire about  Mangrove preservation in NMSEZ Area
      India together 2006 Report on Export Processing zone by Comptroller and Auditor  general of India 
      Newsband June 2021 It’s Official No CRZ clearances for JNPT SEZ, NMSEZ: RTI  responses confirm 
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