CHAPTER- 6

CONCLUSIONS AND POLICY SUGGESTIONS

6.1 Conclusions and Policy Suggestions

6.2 Limitations of the study

6.3 Scope for further research

110

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CHAPTER-6

CONCLUSIONS and POLICY SUGGESTIONS

6.1 CONCLUSIONS AND POLICY SUGGESTIONS:

From the foregoing discussion of SEZs, in reference to Indian Economy and

more particularly in the context of Gujarat, it is but obvious that all is not

well with the practical feasibility of SEZs.

The concept of SEZs no doubt is laudable so fax as it is to be used as a tool

to promote development, generate employment, boost exports and increase

investment. But looking at the progress of things in our country, there is a

need to address some concerns of vital significance. The research scholar in

the below mentioned points takes up the double task of;

(i) Mentioning the issue to be addressed and

(ii) Suggesting a potential remedy.

1) To set up SEZs, the Government has allotted agricultural land to many

private parties. Some times it has been done through force. Two

criticisms have been leveled against this matter;

(a) Allocating agricultural land for SEZs might

reduce agricultural output. This might have

consequences for food security and inflation. It

may also force India to become a net importer for

Ill

food crops threatening her self-sufficiency in this

basic necessity.

(b) Forcible eviction of farmers goes against the

norms of democracy and becomes

unconstitutional. In some case like that in Singur,

land was purchased forcibly from the farmers at

much below the market price to be sold to Tata

Company for its Nano projects.

(c) Another missed out concern is regarding the price

of land which keeps on appreciating. Those

farmers who have not sacrificed their land will

get the benefit of higher value whenever they

wish to sell it in the future. Therefore the farmers

who sold it at the current price would be at the

loss. Government should see to it that some

formula is set to give the benefit of appreciating

price of land to the farmers for some time in

future.

(d) Another issue of equal concern is the rehabilitation

of not only the farmers who sell their land but

also of those people who depend on the primary

land owners (like landless agricultural workers).

Government should chalk out a strategy to

rehabilitate all those who get dislocated due to

establishment of SEZs.

112

The research scholar therefore suggests following potential remedy to it;

a. Most fertile pieces of land should not be allocated for SEZ

development. The state Government should isolate and map

out barren and very less fertile pieces of land for this

purpose.

b. Farmers should be taken in to full confidence before

enforcing them to vacate their lands. External valuation

agencies should be given the task of correctly pricing the

land to be taken away from the farmers. This will take care

off the complaint that the farmers are underpaid. Where the

consent does not come from the farmers the state

Government should drop the idea.

2. Loans are advanced by state governments to SEZ units at nominal

interest rates. The question naturally arises at this juncture as to why to

provide loans to these units at nominal interest rate when they are

already getting the benefits under the SEZ scheme. Giving concessional

loans would amount to double subsidization. Does this not look like the

policy of the government to make rich corporate more rich. It raises

doubts about some possible links between the politicians and the

corporate world. Moreover the discounting principle should be applied

in calculating the interest rate on the loans likely to be advanced.

3. It is also been alleged that SEZs are islands of prosperity amidst the sea

of poverty. This is so because by definition SEZs will be housing

capital-intensive methods of production, employing highly skilled

113

labour force, produce costly commodities meant for the upper section of

society and also provide many facilities within the enclave (like

restaurants, residential complexes, multiplexes, resorts, clubs, etc.)

which will be accessible only to the rich.

4. Therefore the research scholar is of the opinion that along with SEZs the

central Government should insist of setting up social development zones

(SDZs) on one-to-one basis along with SEZs. Such SEZs should house

social infrastructure at highly affordable prices- cheap housing facility,

highly subsidized education and health services- especially for the poor

sections.

5. One more criticism leveled against SEZs is that it would not be able to

provide jobs to those from whom the land has been purchased. This· is

because the techniques adopted by SEZs manufacturers are going to be

highly capital- intensive requiring educated, trained and skilled labour

force. But those who have parted with their lands do not posses any of

those qualifications. So the unemployment created by SEZs will remain

to a large extent unaddressed.

6. A possible solution to this problem could be training programmes

instituted and operated by the state Governments themselves. State

Governments can get in touch with the SEZs manufacturers as regards

the type of labour skills required and accordingly design such

programmes. This will benefit both the parties- the SEZs manufacturers

and the unemployed.

114

7. Very important criticism leveled against SEZs is that; they are capital­

intensive units therefore in comparison to small scale and cottage

industries they are very less employment generating industries. Hence,

instead of SEZs, small scale and cottage industries should be established

to fulfill the goals of generating employment and reducing poverty and

inequalities as per inclusive growth concept. The researcher therefore

suggests that these units with more small scale and agro-based units

should to be established in rural areas so as to develop the state as a

whole through co-existence of development of rural as well as urban.

Pradeep Prajapati (2009, 2010) emphasizes in this regard as;

The pre-condition of the development of Indian Economy is to develop

rural sector through the development of Agricultural sector. Therefore

following steps are needed to be taken to improve the standard of living

of the people by providing them better job opportunities, reducing the

poverty and inequalities prevailing in certain social groups in India as

seen above.

1. Agricultural sector should be treated not as a primary but as an

industrial sector and develop accordingly, providing all the

facilities, given to the industrial sector.

2. To support this sector, agro-based industries and also ancillary

to small and large industries should be established in rural areas.

3. Implement new agricultural strategies through credit schemes

and provide some incentives like insurance to the farmers and

landless laborers against uncertainties as well, so that there will

115

be modernization in agricultural activities even on small and

marginal farms.

4. Agro-based industries should be established in the rural areas

according to the crops cultivated on the bases of agro-climatic

zones, providing adequate incentives to these industries,

managed and controlled either by private, public or co-operative

sectors which will not only increase the agricultural output and

develop the rural sector but also;

(a) Exploitations of the small farmers and landless

laborers by moneylenders, middlemen and large

farmers would be reduced

(b) Investment would be forthcoming in rural areas

so that modernization in agricultural sector will

be possible, which will help in reducing

underemployment and disguised unemployment

and hence poverty.

(c) Reduce inequalities between the regions and also

inter-personal in different social groups

(d) Problem of urbanization would be mitigated

(e) Increase in income will create better awareness

and demand for consumer goods, infrastructural

facilities, education, health, higher rate of literacy

116

which will lower mortality rate, increase in life

expectancy etc. and hence consumption

expenditure mcreases which results m

improvement in living standard.

Thus, development of urban economy would co-exist with the

development of rural economy because of increase in consumption

expenditure and mitigation of urbanization with the ultimate result of

development of economy as a whole.

Such policy changes certainly would achieve the pre-determined goals

under New Economic Policy (NEP). But, it must be remembered here

that, the implementation of such policy implications require a very

strong "Political Will".

117

6.2 LIMITATIONS OF THE STUDY:

Following are the limitations of this study;

1. The concept of SEZs in India being of recent origin and hence

implemented very late in Gujarat State, not much data is

available about it or neither much of research on it has been

conducted covering different aspects of SEZs. This explains

relatively compact version of the present research study.

2. Secondly, the researcher did try to collect primary data but the

problem was four fold;

(a) Any such collection of data would have been in

the nature of case study and not concrete

generalization.

(b) There is confusion since some SEZs are in the

pipe line for approval; some, which have been

approved but have not been implemented, etc ...

(c) During the Gujarat Vibrant programme, many

MOUs were signed but the rate of conversion of

these MOUs in to reality is significantly low.

(d) Some SEZs have started withdrawing from this

project in Gujarat also.

118

So the research scholar had no option but to focus on

secondary data collection.

3. Finally, some of the tables are self-explanatory. The researcher . .

therefore avoided to duplicate the massage by explaining the

tables in words. This to explain relatively less volumes of the

research study.

119

6.3 SCOPE FOR FUTHER RESEARCH:

SEZs is an emerging issue in our economy with the passing of time, more

SEZs are going to be set up and they will be playing a visible role in

"Growth and Development" of the Country. Hence the research possibilities

are many. Researchers can overall evaluate the performance of SEZs on our

economy. They may choose to focus on specific area life SEZs and Export

performance, SEZs and Employment Generation, SEZ sans Sustainable

Development, etc. Researchers may also take up relative comparison of

SEZs within the Country or they may go for International Comparisons.

Researchers on these lines can be conducted for Special Investment Regions

(SIRs) floated by Gujarat State against SEZs.

120

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2. JOURNALS and MAGAZINES

Aggarwal "Stunning Aradhana Success" Business Standard (12/2/2010)

Deliberative Research', a National journal

Economic & Political Weekly, July12, 2008.

International Journal of Human Resource Management

Journal of Development Studies,

Journal of Instaflag Institute

Journal of Social Reality

Mainstream April27-may 3, 2007

Mainstream February 23-march 1, 2007

Mainstream November 2-8, 2007

Mainstream July 18-24 2008

Mainstream 14-20,2008

Mainstream 15-21,2007

South African Journal of Economics

XXIII

3. NEWS PAPERS

Business Standards

Divya Bhasker

Daily News Analyst (DNA)

Economic Times

Financial Express

Gujarat Samachar

Sandesh

XXIV

4. SPECIAL REPORTS

Centre for Monitoring Indian Economy (CMIE) 2008-2009

Employment-Unemployment Survey, NSSO 2004-2005

Indian Economic Survey, Government of India, 2008-2009

International Labour Organization 2000, 2003

Review of International Political Economy

Socioeconomic review, Gujarat State, Directorate of Economic and Statistical

Bureau, Government of Gujarat, Ghandinagar 2008-2009

World Bank Report 2008-2009

World Development Reports

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XXVI