Let the Working Class Rally Against The SEZ Subterfuge

- Arindam Sen

When Kamal Nath walked out of the sixth ministerial conference of WTO in Hong Kong a few months back creating a lot of media hype, we saw in it nothing but cheap theatrics. The individual as well as the class and the power structure he represented were absolutely subservient to the global rich and powerful, we pointed out, and the walkout was only an exercise in making the best of a lost bargaining. The UPA government's recent decision to lift the cap on the permissible number of SEZs in the country, a decision attributed largely to vigorous lobbying by the commerce minister, vindicates our position.

The meeting of the empowered group of ministers (EGoM), which actually took the decision on behalf of the government, was marked by intense debates between the finance minister and the commerce minister. P Chidambaram circulated a note quantifying the revenue losses arising out of the tax giveaways for SEZs — a staggering Rs 70,000 – 100,000 crore. The finance ministry felt that big malls, golf courses and entertainment zones will be set up in these areas as crafty developers would take unfair advantage of the SEZ rules to make a quick buck from the real estate by using duty free raw material. Kamal Nath on the contrary opined that the zones would instead lead to revenue gains of around Rs 44,000 crore over the next 5-10 years, besides creating lakhs of jobs. He was strongly supported by communications and IT minister Dayanidhi Maran, agriculture minister Sharad Pawar and defence minister Pranab Mukherjee. The liberalisation fanatics naturally won the day. It was declared that any review of the rules will only take place after 75 SEZs are operational, or in six months from now, whichever was earlier. Even the impact on government's revenue will only be gauged after these SEZs are functional.

The finance minister's lone opposition is understandable. Not that he is having second thoughts on liberalisation. He has to present the budget every year, and the reduced revenues will further tie his hands. Moreover, his ministry cannot fully disregard the responsibility of maintaining a minimum balance among the different sectors of the economy. On the other hand, ministers, bureaucrats and politicians who have developed a direct vested interest in further opening up of the economy are dying for the SEZs. The latter group, being in the dominance not only in the EGoM but also in the corridors of power as a whole, won as a matter of course.

The decision to go on a mad overdrive for the SEZs, considered to be a major pillar of the Chinese economic success, comes at a time when the Chinese themselves are finding it necessary to make a fresh cost-benefit analysis and readjust their policies. Moreover, what may be at least partially beneficial for the Chinese economy with its strong fundamentals, independent base and firm social security system, may well be suicidal for a crisis-ridden economy like ours, which is already over-dependent on foreign capital. Incidentally, of the 150 zones approved since the SEZ Act came into effect this February, not one has become fully operational till date. Chances are that more than drawing fresh investments, these tax havens will in the main attract existing units from other parts of the country. There will be hardly any net addition in terms of production and employment, but the national exchequer will suffer badly.

Curiously enough, on this issue the self-styled Left watchdog failed even to bark properly. Referring to the feeble demand of the parliamentary Left for a review of the SEZ scheme, Kamal Nath reported that the West Bengal chief minister had written to the Centre complimenting the government on SEZs. Whether the commerce minister was speaking the truth or not (he was not contradicted), Shri Bhattacharya's love for SEZs has been made amply clear in numerous televised statements. Of course, he never forgets to add a rider: no anti-labour practices will be allowed in these zones in West Bengal . But this sugar-coating intended for the CITU lobby and the party's shifting worker base will not make the pill less bitter for those in the know. Under the SEZ Act, every such zone is considered a public utility service where strikes are practically forbidden. This makes hire and fire and other such practices a matter of routine. Moreover, the writ of the state labour commissioner does not run in these zones, all relevant powers being vested in the specially appointed development commissioner. In fact, a labour force robbed of the rights achieved through more than a century of struggle and sacrifice — this constitutes probably the foremost special attraction of these zones to the lords of capital, Indian and foreign.

And this, therefore, also constitutes a special challenge to the representatives of labour, organised and unorganised. For the former, the threat is that many of their workplaces will be relocated to the upcoming SEZs and they will forfeit the rights and benefits they currently enjoy. And many of the unorganised/part-time/casual workers, who at the moment eke out a precarious existence, will find a worse hell awaiting them in these enclaves. These are very real threats. To launch a “pre-emptive strike” against these has become an urgent political task of the TUs in India . And once they take the lead in this regard, there will be no dearth of support from other sections of the working people, whose interests are going to be severely jeopardised by massive curtailment in social sector spending consequent upon reduced revenue of the state.