Special Economic Zones

The project on Special Economic Zones (SEZs) addressed different aspects of a contentious issue. As part of the project, one paper was published in Seminar, four occasional papers and a number of opinion pieces in newspapers were also published and a database of SEZs was made publicly available and was continuously updated.

The first paper, by S N Menon and Soumya Kanti Mitra, provided an overview of the rationale underpinning the SEZ policy. The second paper, by Partha Mukhopadhyay, raised a number of questions about this approach and questioned the seriousness and rigour of the approval process. The experience on the ground seemed to indicate that SEZs are not proceeding in a manner expected in the paper by Menon and Mitra, i.e., they are not promoting manufacturing and nor are they mitigating regional imbalances. The location of SEZs was more fully explored in the third paper by Partha Mukhopadhyay and Kanhu Charan Pradhan. It reinforced the concerns expressed in Mukhopadhyay’s paper. The final paper by K C Sivaramakrishnan focused on the governance of SEZs. It argued that the SEZ, as conceptualised, is not only a production centre; it is also an urban centre. The emerging model of governance for this urban centre, as expressed in various state policies, appears to be non-municipal; a fact that exploits a constitutional loophole, viz. the proviso to Article 243Q. It addressed the implications of this approach in the context of the findings, by Mukhopadhyay and Pradhan, that most SEZs are located close to existing urban centres and are too small to be viable units of governance. A number of key issues remain unaddressed, among which two are perhaps especially critical, viz. (i) the fiscal and macroeconomic implications of SEZs and (ii) the manner of land acquisition involved in assembling the land for SEZs.