Zone of privileges

Print edition : September 08, 2006

IN December 2005, when the Congress government in Haryana led by Bhupinder Singh Hooda arrived at an understanding with Reliance India Limited (RIL) to set up a Special Economic Zone (SEZ) in the State, it was least expected that the deal would snowball into a political controversy. There were several rounds of meetings between the Haryana State Industrial and Infrastructure Development Corporation Limited (HSIIDC) and RIL. The architect of these meetings, according to an RIL source is Dr. Shankar Adawal, the corporate president of the company.

The company had approached the government in September 2005, for creating "economic value and generating employment opportunities" in the State by setting up a multi-product SEZ, spread over 10,000 hectares. On October 17, 2005, a statement of intent was signed between RIL and the HSIIDC, and this was followed by a memorandum of understanding on December 12, 2005, after a decision was taken to set up a joint venture to develop the proposed SEZ. RIL also obtained an in-principle approval from the Department of Commerce on March 31, to establish a multi-product SEZ.

Clearly, there were no bids invited and RIL was the first choice for both the State and Central governments. What was curious was that the HSIIDC, which itself had obtained an in-principle approval on July 28, 2005, to set up a similar multi-purpose SEZ, could have been chosen instead of RIL.

The Hooda government had decided on RIL. Immediately afterwards, it unveiled its industrial policy and announced a slew of initiatives, including the setting up of the SEZ. It was only on June 19 that the deal, a joint venture agreement, was inked in the presence of the Chief Minister by Anand Jain, director of Reliance Ventures Limited, a fully owned subsidiary of RIL, and Rajiv Arora from the HSIIDC.

Sources in the RIL told Frontline in June that the intention of the company was to put Haryana on the global map. The basic concept, according to the source, was to make the aam aadmi (lay person) a partner in the venture, which would take the first step in implementing the principle of corporate social responsibility. RIL had also promised to develop world-class infrastructure, including a dry port, hospital, medical college, health-related institutes and amusement parks. Apart from this, RIL would help Haryana become self-sufficient in power generation. The list was endless.

Notwithstanding RIL's goals of changing the face of Haryana for the aam aadmi, there is concern over the lack of transparency in the land acquisition process, especially with regard to the terms of the compensation given to the displaced people and the long-term effects of handing over huge tracts of agricultural land for industrial and commercial purposes. Several independent observers, such as President of the National Association of Software and Service Companies Kiran Karnik have expressed concern about SEZs. Karnik said SEZs served little purpose in the Information Technology industry. He reportedly remarked that SEZs would only encourage land grab. RIL is not the only company that will develop SEZs. The others include the Raheja group, D.S. Constructions, Unitech and DLF. Of the 607 ha of HSIIDC land, 564 ha is available for the SEZ while the remaining is under litigation.

The SEZ policy of the Centre specifies that 25 per cent of the acquired area is to be allocated for processing or manufacturing activities and 75 per cent for commercial development purposes. The private companies would have little to do with infrastructure development as all the SEZs, including the one to be developed by RIL, are located in Gurgaon, near National Highway 8. All the other SEZs also plan to locate themselves near established centres of infrastructure. The Gurgaon Master Plan 2021 has set aside 1,460 ha of land for the SEZ to be developed by RIL. This comprises the villages of Narsingpur, Mohammadpur, Kharki Daula, Sihi and Garoli Kalan and Garoli Khurd up to Harsaru.

Ever since the HSIIDC-RIL deal was signed, the State government has been in the thick of controversy. It has not got much support even from within the ruling party. Opposition parties such as the Communist Party of India (Marxist), the Indian National Lok Dal, and even a vocal section within the State Congress led by Kuldeep Bishnoi, Member of Parliament from Bhiwani, have consistently voiced their concern over the revenue loss to the government from tax exemptions, the loss of agricultural land, the fate of the landless and the social consequences of change of land use from agriculture to commercial purposes. They also insist that the government come clean on its land acquisition policy.

Ram Kumar, agricultural economist and retired Professor from Hissar Agricultural University, said: "The real intent of the developers and the government has been revealed in the notification of the Master Plan of Gurgaon where the SEZ has been proposed in Gurgaon city, near NH 8 where there are ample possibilities of real estate development."

T.K. Rajalakshmi
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