The document discusses the impact of Special Economic Zones (SEZs) on agriculture in India. It provides definitions and background on SEZs, noting they were established to promote exports and investment. While SEZs provide tax incentives, they require large areas of land that often displace farmers and agricultural production. This leads to reduced cultivable land area, food insecurity issues, small farmers becoming landless, and loss of livelihoods. Case studies show how SEZs dismantle agrarian structures and cause social and economic hardships, highlighting the need to balance agricultural and industrial development.

1. WELCOME
1

2. IMPACT OF SPECIAL ECONOMIC ZONES
ON AGRICULTURE
2

3. INTRODUCTION
3

4. 1. To know the concept and purpose of SEZ.
2. To analyze the impact of SEZ on
agriculture.
3. To review the case studies related to SEZ.
4

5. CONCEPT
5

6. DEFINITION
• “A Special Economic Zone is a geographical region with
different economic laws than a country’s typical
economic laws with the main goal of attracting foreign
investment. In economic terms, a SEZ is a specifically
delineated duty-free enclave and shall be deemed to be
foreign territory for the purpose of trade operations
and duties and tariffs” (Abhyankar, 2006).
6

7. BACKGROUND
• The concept of SEZs is an improvement over
the concept of Export Processing Zones (EPZs).
• Asia's first EPZ set up in Kandla in 1965.
• With a view to overcome the shortcomings
experienced in the EPZ format, a Special
Economic Zones (SEZs) Policy was announced
in April 2000.
7

8. Contd…
• SEZs in India functioned from 1.11.2000 to
09.02.2006 under the provisions of the
Foreign Trade Policy.
• A comprehensive Special Economic Zone
legislation was enacted in June 2005, which
came into effect on 10th February, 2006.
8

9. GUIDELINES FOR LAND ACQUISITION UNDER SEZ
• Cultivable land should
be considered only if
adequate quantum of
other land is not
available.
• First preference
should be for
acquisition of waste
and barren land,
followed by single
crop land and double
crop land. 9

10. SETTING UP OF SEZ
• SEZs are notified by the Ministry of Commerce
and industry & can be set up by private
developers or by Central / State Governments
or jointly by any two or more of the above.
10

11. 11

12. Land Requirement for SEZ in India
-Ground realities
•Total Land Area 2973190 sq km
•Agricultural area 54.5% 1620388 sq km
•Extent of land for setting up SEZs in India
Total Area :1885 sq km
As % of total land area 0.063%
As % of Agri land 0.116%
www.sezindia.nic.in
12

13. Fact Sheet on Special Economic Zones
www.sezindia.nic.in 13

14. Incentives and facilities offered to the SEZs
 Duty free import/domestic procurement of goods for development,
operation and maintenance of SEZ units
 100% Income Tax exemption on export income for SEZ units for first 5
years, 50% for next 5 years thereafter.
 Exemption from Central Sales Tax.
 Exemption from Service Tax.
 Single window clearance for Central and State level approvals.
 Exemption from State sales tax and other levies as extended by the
respective State Governments.
www.sezindia.nic.in
14

15. Types of SEZs
1.
• Multi–product SEZs
2.
•Sector-specific SEZs
3.
• Gems and jewellery
15

16. SEZs comprises of:
•Processing
area
1.
•Non-Processing
area
2.
16

17. Purpose of SEZ
1. Promotion of export of
goods and services.
2. Promotion of investment
from domestic and foreign
sources.
3. Creation of employment
opportunities.
4. Development of
infrastructure facilities.
5. Fostering linkages with the
rest of the economy. 17

18. Promotion of export of goods and services
• Exports from the functioning SEZs during the
last few years:
Year Value (Rs. Crore) Growth Rate ( over
previous year )
2003-2004 13,854 39%
2004-2005 18,314 32%
2005-2006 22 840 25%
2006-20007 34,615 52%
2007-2008 66,638 92%
www.sezindia.nic.in 18

19. Promotion of investment from domestic and
foreign sources
Country $ billion
India 9.8
China 67.5
Russia 19.0
Singapore 19.7
Mexico 20.4
Brazil 17.3
Hong Kong 36.8
Turkey 10.9
Annual inflow of FDI (Average for 2004-2006)
MAJUMDAR, 2007 19

20. Creation of employment opportunities
Worldwide employment created in Free Zones (million)
MAJUMDAR, 2007
20

21. Development of infrastructure facilities
India’s relative ranking in infrastructure
MAJUMDAR, 2007
21

22. Fostering linkages with the rest of the
economy
1. Forward linkages
2. Backward linkages
• These linkages lead to manufacture higher
quality products.
22

23. Impact of SEZ on
Agriculture
23

24. 1. Fertile land is taken by SEZ reduces the cultivable land.
2. Food insecurity.
3. Small & marginal farmers turn landless.
4. Source of livelihood is being snatched by corporate &
capitalist.
24

25. Contd…
5. Inadequate enforcement of scheme of resettlement
cause social destitution.
6. It alters the natural resource capital and spoils the
cultural identity.
7. Downward impact on Tax:GDP ratio & the common
man has to pay the price of it.
8. Impact on environment.
25

26. Reduction in the cultivable land
By diverting cultivable land to non-agricultural
purpose ( setting up of SEZs).
Acquisition of land from farmers.
Leads to reduced growth of agriculture.
Leads to decrease in the production of
agriculture.
26

27. Contd…
• Across India, the total amount of land, which
will be acquired, is around 1,50,000 hectares
and this amount of land is capable of
producing around 1 million tons of
agricultural produce.
www.business.mapsofindia.com
27

28. Contd…
SEZ AREA Proportion of agricultural
land to waste lands
Bharat Forge, Pune,
Maharashtra
700 ha 70%
Reliance Industries, Raigad,
Maharashtra
1400 ha 100%
Reliance Industries, Jhajjar
and Gurgaon, Haryana
10117 ha 90%
Hi-tech SEZ Nokia and
Flexitron, Sriperumbudur,
]Tamil Nadu
323 ha 80%
Proportion of Agricultural land to waste lands acquired for SEZ
SHARMA, 2007
28

29. Food insecurity
Demand for food is projected to increase by 50
percent over the next 20 years.
To feed a world population expected to surpass 9
billion in 2050, it is estimated that agricultural
output will have to increase by 70 percent
between now and then.
(www.fao.org)
29

30. Contribution of Agricultural sector to the country’s GDP
www.indiabudget.nic.in 30

31. www.indiabudget.nic.in
31
-0.4 -1.4

32. www.indiabudget.nic.in 32

33. Small & marginal farmers turn
landless
It is estimated that more than
10 lakh people who are
dependent upon agricultural
lands will be evicted from their
lands.
Almost 80% of the agricultural
population owns only about
17% of the total agriculture
land, making them near
landless farmers.
(www.business.mapsofindia.com) 33

34. DISPLACEMENT AND LOSS OF
LIVELIHOODS
• Estimates show that
close to 114,000 farming
households and an
additional 82,000 farm
worker families who are
dependent upon these
farms for their
livelihoods, will be
displaced.
34

35. Contd…
• Experts calculate that the total loss of income
to the farming and the farm worker families is
at least Rs. 212 crores a year.
(www.business.mapsofindia.com)
• If SEZ is built on agricultural land the farmers
will loose their livelihood as they are not
skilled laborers & it would be tough to
relocate them to other jobs.
35

36. Inadequate enforcement of scheme of
resettlement cause social destitution
• “For the larger public purpose, displacement of a
few people is unavoidable.” refrain amongst
officials.
• Mere monetary compensation for loss of their
lands and physical relocation to other places in
the name of rehabilitation can never be an
adequate measure.
36

37. Alters the natural resource capital and spoils
the cultural identity
Displaced farmers move into cities and
resettlement sites which leads to loss of their
cultural identity.
Loss of indigenous tradition and culture.
Disintegrations of firmly settled communities.
Altering the natural resource capital.
37

38. Downward impact on Tax:GDP ratio & LOSS OF
PUBLIC REVENUE
Tax:GDP ratio (%)
www.indiabudget.nic.in 38

39. LOSS OF PUBLIC REVENUE
• A loss of Rs.1,60,000 crore till 2010 in
revenue.
• The foregone tax revenue every year is five
times the annual allocation for the NREGS and
is enough to feed each year 55 million people
who go to bed hungry every day.
39

40. 40
Impact on Environment
 Effluent will deteriorate physical condition of soil.
 The chemical effluents will also effect the
bio-resources.
 The sub-surface and under ground water quality
will be impaired.
 The fertile land will become unproductive for the
agriculture.
 The environment will be affected by such
pollution.
 The land value will be decreased.

41. Burning example of
Farmers’ protest against
SEZs in India
41

42. Nandigram violence
• March 14, 2007
• Acqusition of
10,000 acres (40 km2) of
land for a SEZ to be
developed by the
Indonesian-based Salim
Group.
• Bhumi Uchhed Pratirodh
Committee's (BUPC)
www.en.wikipedia.org 42

43. Contd…
• The police shot dead at
least 14 villagers and
wounded more than
70.
• Most of the land to be
acquired is multi crop
and would affect over
40,000 people.
• Location shift
(3 September)
www.en.wikipedia.org 43

44. CASE STUDIES
related to SEZ
44

45. Implications of a Special Economic
Zone on Project Affected People
(A Case Study of Reliance Haryana
SEZ)
VINEETA SHARMA
(2007)
45

46. Economic Impact on Different population
Groups
1. Landowners: They reinvested the compensation
money in purchasing agricultural land in nearby
region at lower rate.
2. Agricultural labourers: They devoid of their only
source of livelihood thus pushed into poverty.
3. Reliance agents: They earned a heavy
commission on every deal.
46
SHARMA , 2007

47. Social impact: Dismantling of Agrarian
Structure
Land owners
Other
Economic
groups
Agricultural
labourers
Land owners
Other
Economic
groups
Agricultural
labourers
Reliance
agents
Wages
Grain
Fodder
Loan
Before SEZ intervention After SEZ intervention
47
SHARMA , 2007

48. Rehabilitation
• Objections against this SEZ are raised due to
conversion of arable land to non-agricultural
use without appropriate mechanisms for
compensation and rehabilitation of the
project affected people.
48
SHARMA , 2007

49. Resentment
Primary survey revealed that 65% of the
respondents were against any kind of physical
relocation.
Villagers feel cheated as their land, taken over
by HSIIDC under the Land Acquisition Act, is
now being transferred to Reliance.
49
SHARMA , 2007

50. Special Economic Zones:
Engines of Growth or
Destruction?
S. Usha Seethalakshmi &
G.V. Sarat Kumar
(2009)
50

51. Forcible acquisition of lands by APIIC
for establishment of SEZs
 In Kakinada SEZ, where farmers resisted land acquisition,
the revenue officials took the help of police in Forcible
acquisition of lands.
 In Chittoor Sri City SEZ, the revenue officials imposed a
registration ban, which prevents farmers from voluntarily
selling their land to anyone else.
51
SEETHALAKSHMI & KUMAR , 2009

52. Inconsistencies in relation to official
data on land acquisition
Data available from APIIC as on January
2009 is 6100 acres ( for 57 notified SEZ).
But field research in 13 notified SEZs in 9
districts shows that it is 13,199 acres.
52
SEETHALAKSHMI & KUMAR , 2009

53. Impact of SEZ on rural livelihoods
Palm trees, an important source of livelihood to
hundreds of toddy tapping families & a common
property resource in most of the villages in
Kakinada, are now being cut down for paving way
for the SEZ.
Due to forcibly acquisition of paddy lands for
KSEZ, women’s livelihoods in all the neighbouring
villages have been affected.
53
SEETHALAKSHMI & KUMAR , 2009

54. Measures to be taken into
Consideration
1. More comprehensive land use policy is needed that
balances between agriculture and industrial
development.
2. Strict official ban on conversion of agricultural and
irrigated lands to non-agricultural purposes and SEZs.
3. Establishment of SEZs on waste and fellow lands.
4. Special rehabilitation packages for project affected
people.
5. Training and skill development programmes to help
farmers and agricultural labourers to pick up other
occupations.
6. Concern for Environment protection.
54

55. CONCLUSION
55

56. Agriculture and industry are the main wheels
of the country’s economy and so there is a
need to strike a fine balance between them.
56

57. Vikas aisaho jo aAfatse bachaye
VikasaisahojoaAfatna banjaye
57

58. 58