Not yet special enough: Special Economic Zones, part 1

Gurgaon workers news examine plans for a new Special Economic Zone in the Gurgaon area, India, 2007.

Submitted by Steven. on February 16, 2010

The following is a summary of recent newspaper articles concerning the planning of a SEZ in Gurgaon area. This can only be a first step towards a more general understanding of the capital and class composition in the area and the general process of urbanisation. The main questions concerning the bigger picture are:

– What kind of industries are concentrated in Gurgaon, how are they intertwined locally and beyond?
- What is the role of the state and private development companies in the expansion process?
- In which way is the village economy and agricultural surrounding important for the expansion and for the local labour market?
- What are the general movements on the labour market?

We have to avoid to get hooked on the different legal forms of exploitation, e.g. by demonizing Special Economic Zones or the impact of foreign direct investment and creating illusions about the workers’ friendlyness of the public sector or of ‘homegrown capital’. Nevertheless it makes a difference for the conditions or workers’ struggles whether they are exploited in a (public sector) school or an (export) textile mill. Recent uprisings in Vietnam, Southern China and Bangladesh have shown that particularly in the export zones a young and uninstitutionalized workers’ movement appears on the stage. This is not because there the working conditions are particularly bad or exploitation relatively worse, often the opposite is true when we compare it to the conditions in older or small scale industries in the respective countries. The erruptions are more due to the fact that these workers know about their potential power: they see their generation united by similar experiences (migration), they know about the importance of their work (export), there is no incorporated (union) institution which would have an interest to sell them out and they know that due to the generalisation of conditions their struggle will very likely spark off chain reactions of discontent.
In Gurgaon area we have some similar features: spacial concentration of industries, importance of export and multi-national companies ( e.g. 75 per cent of all Japanese FDI in India flow to the area), a young migrant work-force, most of them on contracts, meaning that they have worked in various factories in the area.
The SEZ might intensify this concentration process. Right after taking over the Congress-led Haryana government decided in June 2005 to set up the SEZ in a private-public cooperation. The main developer is the private company Reliance Industries Ltd., the company also holds 90 percent of the shares of the project. Reliance Ltd. started as a company in the chemical sector and became huge by attracting small share-holders and riding the late 80s stock-market boom. Nowadays Reliance is in chemicals, communications, energy sector, real estate and others. In cooperation with the Haryana State Industrial and Infrastructure Development Corporation they plan to set up a 25,000 acre SEZ, which would be the largest SEZ in India. It is supposed to provide a cargo airport and a 2,000-megawatt power plant.
Officially the numbers of created future jobs in the SEZ vary quite a bit: the Haryana political leaders speak about the creation of 500,000 jobs, Reliances Industries Ltd. about 200,000. The actual industrial composition is still unclear. Just from scanning recent news items it seems that apart from IT, textile and automobile industries the trend goes towards bio-tech and pharmaceutical industries and companies manufacturing for the “green energy sector” (wind turbines, solar-energy, bio-fuels). Confusingly enough there are two more SEZ announced in the Gurgaon area, one by Rockman Projects, a multi-service SEZ, and one by Orient Craft, a textile hub. Rockman Projects anounces that as of December 2006, the land has been fully acquired in Gurgaon. The SEZ will be spread over 1,615 hectares and will also be located on National Highway 8. Orient Craft announced to set up a 750-acre SEZ, which is supposed to employ 30,000 people once finished. In the official Masterplan 2021 a total of 4,570 hectar is allocated to Special Economic Zones.
Clear is the trend to develop industrial land in Manesar, a small town in the south of Gurgaon, about 20 to 30 km down the highway. Official term for the outcome is Industrial Model Town-Ship (IMT). The Haryana government already announced a bulk of tax exemptions for companies which would settle in the IMT. After Honda HMSI opened their plant on the green field, also Maruti Suzuki set-up the new plant there, with various bigger suppliers in tow. According to the governmental Gurgaon-Manesar Masterplan 2021 about 700 hectars of land was converted into industrial area.
About the development of the SEZ first critical voices appear, e.g. of the Sampuran Kranti Manch, stating that Reliance Ltd. is more interested in the land acquisition for planning golf courses and Disney theme parks than in creating jobs. Compared to the situation in Singur or Nandigram the farmers seem to be less resistant to the selling of their land, which might be due to the fact that Haryana was one of the states of Green Revolution, meaning that subsistence or small scale farming has not a chance of survival anyway. Of course the media portrays the farmers as the winner of the situation, as people making loads of money by selling their property. This ignores that according to the magazine Frontline more than 50 percent of the people who live in the area are landless, they will be displaced and lose their jobs in agriculture (the official notification of the government states that the developer would have to provide alternative housing and jobs). The farmers say that the land is actually very fertile and that it is a shame to cover the soil with marble, but that nevertheless prices for agriculture products are down and cannot compete with the prices for land offered by companies like Reliances.
That not everyone is happy to leave their land is obvious. On 28th of March villagers from Gadauli Khurd opposed the occupation of land by Haryana authorities for a proposed SEZ to be set up by Mukesh Ambani’s Reliance Industries, chasing away police and a squad that had gone to the area to demolish some houses and tube-wells. The local people gathered to oppose the demolition work and pelted stones at the team, which comprised a HSIIDC official. The window of a bulldozer was damaged and the team had to retreat due to the opposition by the villagers. Physical possession of the land will be taken soon with the help of police force and it would be handed over to RIL, said Gurgaon’s deputy commissioner Mr Rakesh Gupta. The villagers said they were opposing the demolition as the land was originally acquired by HSIIDC for the development of an SEZ by the corporation but was now being handed over to a private party. Sources said the current dispute related to about 300 acres of the total of 1,380 acres to be given by the Haryana government to RIL for its SEZ. So the overall effect on the rural population has still to be seen. Other voices criticise that the state would pamper private companies with tax exemptions and other incentives, while the state explaines, that the income from interests and general prosperity will more than counter-balance the low taxation. Fact is that compared to expected profits and attracted capital, state and companies managed quite cheaply to turn a large amount of farm land into an industrial area.
We still have to see what is actually behind the SEZ boom. There are already various “parks” in Gurgaon, IT-City, textile and cyber parks, automobile hubs. If you have always wondered what a Cyber City is, here the explanation from the Haryana Government Masterplan 2021: “Cyber City means self contained intelligent city with (…) high speed communication access to be developed for nucleating the Information technology concept and germination of medium and large software companies”. Some hot air with your bits and bytes, sir…? In the notification from May 2006 the Haryana government declared that it granted approval for 23 SEZ to be developed in the state. If the actual legal terms of SEZ will actually apply in all of the announced projects, is still unclear. Already existing are the impacts on the real estate and land prices in the area, another topic yet to cover.
Gurgaon Workers News – Newsletter 2 (April 2007)