Saturday, June 6, 2009

Ambani Land Grab Ploy Fails

By Roger Alexander

The Supreme Court's refusal on June 5 to extend the deadline for land acquisition for Mukesh Ambani's MahaMumbai Special Economic Zone (SEZ) has come not a day too soon. It unambiguously provides major relief to thousands of farmers in Maharashtra's Raigad district who stand to lose their farms to land sharks disguised as a corporate entity.

The bench said it was not inclined to interfere with the Bombay High Court order, which had refused to stay the land acquisition process initiated by the Maharashtra government in June 2005 for the SEZ.

As per the law, the requisite land had to be acquired within two years of the notification. But the Raigad district administration and Reliance have failed to acquire the land despite two extensions to the deadline.

The latest deadline expires on Monday, June 8. After that date if the Ambani group still wants to go ahead, the land acquisition process will have to start all over again. However, it is being speculated that the promoters along with the State Government may work out a strategy to retrieve the situation.

The Mumbai SEZ, which envisages an investment of Rs 40,000 crores, is slated to come up in a 10,000 hectares area in Raigad. The project, which has already been given two extensions, was given clearance in 2005. It was in this context that the company wanted to speed up the acquisition procedure so that it would not lapse.

However, it has not got relief either from the High Court or the apex court.

The Maharashtra government had conducted public referendum on the project in September 2008. In the referendum conducted in 22 villages nearly 24,000 farmers took part and 91 per cent voted against the SEZ.

Why are the farmers protesting, ask supporters of SEZs, especially since they are being offered “hefty compensation.” Besides, SEZs will create spaces with good infrastructure and simplified procedures that will assist industrialization, they argue.

What is not said is that owning a SEZ means tax breaks, highly subsidized land and little or no compulsory worker protection. Proponents argue that these concessions are essential to attract investment, in a world of increasingly mobile capital but the farmers know better - once they give up their land, they will lose their livelihood.

That's why farmers of 22 villages of Raigad district opposed the land acquisition process in a referendum initiated by the state government last year. Though the government did not act, the farmers sent a clear message – they defeated sitting Congress MP and Cabinet minister AR Antulay and handed a victory Shiv Sena's Anand Gite. The Shiv Sena had spearheaded a protest against the Ambani SEZ last year.

It is well known that as it is the land acquisition law and process is extremely unjust (ask the farmers displaced by the Narmada project). But at least there is a need to prove the existence of a strong public interest. In the case of the SEZs, the rules have been dispensed with.

The Special Economic Zones Act, 2005 (Act No. 28 of 2005, dated June 23, 2005), is, in its own words, “an Act to provide for the establishment, development and management of the Special Economic Zones for the promotion of exports and for matters connected therewith or incidental thereto.” Indeed, the SEZ Act is nothing but a legislation for legal plunder.

In addition to the massive fiscal concessions, there is plenty of room for huge profits to be made from real estate deals within these gated and walled enclaves of privileges where the elite can lead Western life-style without even a shadow of the poverty and squalor of other parts of the country.

And the land acquisition means everyone - not just those with property titles – will be affected, especially tenants and agricultural labourers, who do not have to be compensated.
Besides, exemptions, direct or indirect, from various protective laws (for example, laws to protect environment and labour) mean that the industrial units here will be able to function in a very arbitrary way, unencumbered by responsibilities normally expected from them.

This means that even farmers who agree to sell their land have no protection of labour laws applicable in the country if they find employment in the SEZ. Ambani will also have privileged reach to farmers outside the SEZ areas, so one can expect faster spread of “modern” agriculture (read Reliance Fresh).

The worst feature, however, is the huge revenue losses - 100 per cent exemption from income tax on profits for the first five years and 50 per cent for the next five years. Even land developers get tax breaks!

Indeed, according to a government press release, the SEZ is a specifically delineated duty free enclave and shall be deemed to be foreign territory for the purpose of trade operations, duties and tariffs. To give up such huge resources is a major crime, given the needs of Indian society and the utter lack of social provision.

With state Assembly elections due in a few months, it is unlikely that the Maharashtra government will come to Ambani's rescue. The experience of West Bengal where even die-hard supporters of the Left Front voted against it over the question of land acquisition is fresh in every politician's memory.

Roger And Out

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