Special Economic Zones (SEZs) and Their Critique :

A Case of Nandigram Struggle

A. Venkateswarlu*

Abstract

Special economic zone (SEZ) concept has been introduced to expand export-oriented
production. Attraction of foreign direct investment and export promotion are the two main
purposes of the SEZs. The land acquisition is made by the governments (state and central), by
exercising the “public purpose” provisions. The concessions, subsidies and exemptions being
extended by the governments would certainly generate fiscal crisis for the state and central
governments. A lot of land is being acquired by the governments to keep the lands at the
disposal of the Developers of the SEZs. But, proper rehabilitation and resettlement (R&R)
schemes have not been prepared and particularly the people being affected have not been
involved to voluntarily surrender their lands. As a result, there is a lot of scope for the land
being diverted to ‘real estate’ scams. It is a type of accumulation by dispossession, in favour
of the foreign and domestic monopoly capitalists. As the people are not taken into confidence,
the forceful evictions and involuntary surrender of lands occurred; and the people started
struggling against the SEZs. In West Bengal, after people’s struggle the Nandigram SEZ was
scrapped; and the Singur project has been declared withdrawal.

1. Context and Objective of the Study

Special Economic Zone (SEZ) concept as a panacea for development has been
highlighted in the recent past everywhere in the world. Export-led economic growth has been
an important part of the economic strategy prescribed to developing countries for their
progress and development especially since the 1970s. The first export processing zone (EPZ)
was set up in Ireland in 1959 and the first EPZ in Asia was established in India at Kandla in
1965. Originally conceived as zones of experiments with the free market in an otherwise
protected economy, these zones were implemented with increasing intensity and varying
results in Asia since the 1970s (Sampat, 2008).

The concept EPZ has been replaced by SEZ. Between 1975 and 2006, the number of
Free Zones has shot up from 79 in 25 countries to 3500 in 130 countries. Over the last
decade, many new zones have been developed in Africa, Eastern Europe and transitional
economies. China’s Shenzen has been a success, which suggests that SEZ concept may work
not only in small countries but also in large economies (Majumdar, 2007).

The first export processing zone (EPZ) in India was established in Kandla in 1966. By
2003, the existing 8 EPZs had been converted into SEZs. There is a difference between EPZ
and SEZ. EPZ was the nomenclature for enclaves that were meant for “processing” i.e.
manufacturing. SEZs are allowed for mere warehousing/ trading.
_______________________
* Associate Professor, Centre for Economic and Social Studies, Hyderabad. This is presented at the
National Seminar on Special Economic Zones: Engines of Growth and Social Development for
India, held at NIzam College, Osmania University, Hyderabad, October 16-17, 2008.

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 As the SEZs in India have recently turned out to be a political landmine as is evident
from the Tata’s project at Singur at present, it draws everybody’s attention. The main
objective of the study is to explore important aspects related to SEZ (Special Economic
Zone). However, the specific objectives are:

(i) to depict the theoretical background of the SEZs

(ii) to delineate the process of forming SEZs and the purposes of SEZs in India;
(iii) to analyse the role of government in establishing SEZs;
(iv) to present a critique of SEZ policy in India;
(v) to bring out the problems involved in SEZs; and
(vi) to examine the struggles against the SEZs in general and the struggle in
Nandigram of West Bengal as a specific case.

2. Theoretical Background of SEZs

The process of industrialization and economic development is always related to the

conversion of land for non-agricultural activities from agricultural purposes. The transition
may be gradual sometimes. The change in land-use is accompanied by large-scale
displacement sometimes. Thus, the issue of development requiring land acquisition has
always been one of the most contested policy, depending on social, political, economic and
cultural life of the people. Large-scale acquisition of land may trigger controversies and
conflicts (Sharma, 2007).

When neo-classical framework of Heksher-Ohlin trade theory model was applied in

regard to the policy of setting up of a free zone (SEZ), some studies arrived at a negative
welfare and some others showed welfare-enhancing character. However, the idea behind
SEZs was to promote and create hassle free territorial production complexes that could be
established to secure regional balance in development opportunities. The major contributions
of SEZs for the development of the economy be briefly accounted as follows (Majumdar,
2007).

1. Attracting Foreign and Domestic Investment in Enclaves: Because of the

provision of facilities and amenities on the one hand and incentives on the other,
the capital flows in.

2. Stimulating Exports: This is the major purpose of the SEZs.

3. Creation of Employment: The SEZs cannot be counted as a solution to the

unemployment problem, they are nonetheless a viable source of employment
creation.

4. Leading to Balanced Development: Though it is good to develop all the regions

simultaneously, such balanced development requires a lot of resources at a time.
So the regional development can be undertaken in stages. Thus, to develop certain
areas as leading areas like SEZs is a solution.

5. Fostering Linkages with the Economy: Deepening backward and forward

linkages with the rest of the economy may bring in technological development
and quality production of goods when SEZs interact with DTA (domestic tariff

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 area). New production sectors and catalytic effect to export are induced into non-
SEZ area due to demonstration effect.

3. The Process of Forming SEZs and Purposes of SEZs in India

3. 1 The Process of Forming SEZs in India

Murasoli Maran Minister of Commerce, visited the Gwangdong Special Economic

Zone in China under NDA government in 2000. Impressed by the razzle-dazzle of Chinese
SEZs, Maran introduced a policy in India for SEZ on April 1, 2000. Immediately the
existing EPZs were converted into SEZs. In 2004, Bill was introduced under NDA
government. The intervening elections in 2004 and the change in government from the NDA
to the UPA, supported by CPI (M) and left parties, made no difference to process of steering
this bill. On May 10, 2005 bill was tabled in the parliament. It was passed by both the
houses, with in 2 days, by May 12, 2005. No proper deliberation and debate was made in
the parliament on such an important issue which was going to affect the future of agriculture,
agriculturally dependent population, the whole rural sector, land use, employment
generation, urbanization process and whole social fabric.

In India, SEZ Bill was passed in May 2005, and the Act received the Presidential
assent was given in June 2005. The Act and Rules were notified in February 2006. As per the
Act, a SEZ is “a specifically delineated duty free enclave and shall be deemed to be foreign
territory for the purposes of trade operations and duties and tariffs.” Special Economic Zone
comprises of both processing and non-processing areas.

3.2 Purposes of SEZs and Guidelines for Approval in India

In India government by law allows public enterprises, private persons and joint
ventures to build and develop SEZs, whereas in most countries SEZs are allowed to be run
by government but not by private agencies for their development The four purposes for
which SEZs can be sanctioned in India are:

(i) export promotion,

(ii) export oriented production of services,
(iii) export oriented production and services, and
(iv) free trade and warehousing.

There is no limit on the size of SEZ and for the number of SEZs. In regard to the
development of SEZ, it is not required to specify the purpose of SEZ and specify the area
where SEZ is to be set up; and if one developer has no minimum limit land required, more
than one developer can be given approval; but there is no binding on the developer to make
allotment for the four purposes(Sawant, 2007).

Originally, the cap on number of SEZs to be approved was put as 150 in July 2006.
But later the cap was removed. In a way this has given scope for the rush of getting approval
for SEZs (Ramachandran and Biswas, 2007).

The guidelines to be followed at the time of SEZ notification are: (i) generation of
additional economic activity, (ii) promotion of exports of goods and services, (iii) promotion
of investment from domestic and foreign sources, (iv) development of infrastructure

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facilities, and (v) maintenance of sovereignty and integrity of India, the security of the State
and friendly relations with foreign States (Gopalakrishnan, 2007). If these guidelines are
strictly followed, there may not be any possibility for misappropriation and misuse of the
land acquired for the SEZ.

4. Role of Government in Establishing SEZ in India

4.1 Acquisition of Land for the SEZ

No specification is made as to how the land for SEZ is to be acquired, as per SEZ
Act. The government acting as a broker, has to provide land by enforcing Land Acquisition
Act, 1894. As per Land Acquisition Act, 1894, land can be acquired by the government for
“public purpose”, as per section 44(B) (i) for Dams and (ii) for providing accommodation to
the public sector industry/services (Sawant, 2007).

As per Land Acquisition Act, 1894, acquiring land for private purpose development
is clearly illegal (i.e. not being public purpose), as section 44(6) has not been amended so
far. SEZ becomes almost a foreign territory, as every person should have an identity card
(like visa to foreigners).

Peasants are being displaced for SEZ, and lands are being kept fallow. The time
given to a developer is 3 years, for the establishment of SEZ, and it is extendable by 2
years, i.e., totally 5 years. Only if the developer fails to do so, then only government may
allocate to new developer. But, “what will be the stand of the government if the original
developer sells the land to the new developer at a price which is many times the price, which
he originally paid for?” These is no guiding principle in the SEZ Act as to how the surplus
land, due to insufficient industrialists and service producers, should be used by the developer.

How the developers have to allot land to the industrialists is also not clearly specified.
There are no guiding principles in SEZ Act about the rent on the basis of which the developer
will make available land to the private industrialists in respect of rate of rent, mode of rent
fixation and selection criteria of industrialists.

There is a clear discrimination between SEZ and non-SEZ areas because of tax
conceptions in SEZs and better amenities in SEZs. As a result, due to competitive market
conditions (national and international); industries functioning outside SEZ areas would prefer
to join SEZs, by relocation with in SEZs.

The land transferred to SEZs has geological content in it and so compensation

received by the government is not a real value, because: (i) nature spends many years to
create a layer of merely one inch of soil, and (ii) the fertile soil formed by protected labour to
make the land cultivable.

4.2 Incentives for SEZ Companies including SEZ Developer

The SEZ Act offers a highly attractive fiscal incentive package, which ensures (i)
exemption from custom duties, central excise duties, service tax, central sales taxes and
securities transaction tax to both the developers and the units; (ii) tax holidays for 15 years
(currently the units enjoy a seven year tax holiday), i e, 100 per cent tax exemption for 5
years, 50 per cent for the next five years, and 50 per cent of the ploughed back export profits

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for the next five years1; and (iii) 100 per cent income tax exemption for 10 years in a block
period of 15 years for SEZ developers (Aggarwal, 2006).

4.3 Labour Laws Not Applicable in SEZs

Labour laws are not applicable to SEZs, there is a greater possibility for the workers
to suffer from adverse working conditions, a type of wage slavery will take place from the so
called labour flexibility conditions (Sawant, 2007). As per SEZ Act many changes in the
existing laws of India are made particularly under section-50 of SEZ Act, which says:

“ The state government may, for the purposes of giving effect to the provisions of this Act,
notify policies for developers and units and take suitable steps for enacting of any law:- a)
granting exemption from the state taxes, levies and duties to the developer or the
entrepreneur; b) delegating the powers conferred upon any person or authority under any State
Act to the Development Commissioner in relation to the developer or the entrepreneur”
(Singhvi, 2006).

Accordingly, in Andhra Pradesh, Karnataka, Maharastra, Madhya Pradesh, and Uttar

Pradesh, the Development Commissioner has been delegated to amend many Acts relating to
labour undermining the authority of the Labour Commissioners of the respective states. In
Andhra Pradesh, the Industrial Disputes Act, Bonus Act, Payment of Wages Act and other
Acts have been made amendable. In Maharashtra, Contract Labour Act (for dividing labour
into core and non-core sectors), Public Utilities declaration, Bonus Act, Maharashtra
minimum HRA Act, Payment of Wages Act and Motor Transport Workers Act can be
amended. In Karnataka, Trade Union Act 1928, Industrial Employment Act, Industrial
Disputes Act, Inter-state Migrant Workers Act, Minimum Wages Act, Bonus Act , and The
Equal Remuneration Act are all kept under the purview of the Development commissioner.

In Uttar Pradesh, a short and clear notification has been issued giving the powers of
the Labour Commissioner under “all labour laws” to the Development Commissioner of the
SEZ. Here the provisions of Chapter VB (against illegal retrenchment, closure and lay-off)
have also been made inapplicable in SEZs. Similarly in Madhya Pradesh, besides making all
units “public utilities”, section 9A of the I.D.Act, (requiring agreement with the union before
effecting a change in service) has been made inapplicable to SEZs. Some Standing Orders
have been made inapplicable to the SEZs and even some sections of the Factories Act and the
Shops and Establishments Act, relating to hours of work and holidays. In this connection,
Singhvi (2006) says:

“It is not as if such Development Commissioners can have the least care for the welfare of
workers. They are primarily charged with the development and propagation of the SEZ. It is a
farce and a mockery of justice to also charge them with the supervision and implementation of
labour laws. It is known that they will sacrifice the workers at the altar of “profits” for the
units – that is why these powers of supervision and inspection under labour laws have been
given to them.”

4.4 Expected Benefits– Vs – Expected Losses

There are also doubts, and ifs and buts, on the expected fiscal gains or losses to the
government coffers. In UPA government, the Finance Minister says about losses and the
Commerce Minister says about benefits. The losses from the tax concessions to the SEZs
could be the order of Rs.1,60,000 crores, as per Finance Minister. In contravention of this,
the Commerce Minister says that the benefits are to the tune of Rs.6,44,000 crores, as

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distributed into (i) investment (Rs.1,00,000 crores), (ii) tax revenue (Rs. 44,000 crores) and
employment creation (Rs.5,00,000 crores). Raghuvansh Prasad, Central Minister from the
RJD party, criticized SEZ policy as a big land grabbing affair. Janatha Dal (V) asked the
Bill to be scapped. Mr. V.P. Singh, former Prime Minister of India, demanded to declare
moratorium on the SEZ Act.

5. Critique of SEZ Policy in India

5.1 Land Acquisition by the Government for the Private Developer.

The major problem in the establishment of the SEZs is the land acquisition by the
government for the private developer. The land acquisition is being made under the Land
Acquisition Act of 1894. The SEZ Act 2005 marks is the acquisition of land by the state for
“public purpose” and the transfer of the ownership of this land to private developers. The
trajectory of neoliberal corporate growth through accumulation by dispossession (as per
David Harvey) thus becomes clearer in this land-acquisition process. The phenomenon of
neoliberal growth in the “competitive” “free market” enclaves of SEZs in India that threaten
to dispossess and displace thousands of people of their livelihoods, cultures and lands, in the
exercise of “public purpose” handing their land over to private corporations for economic
growth and development that too in the name of “greater common good of all” (Sampat,
2008).

In the Chinese case, which the government is so fond of citing, land for SEZs was
acquired by the state, whose agencies then developed the infrastructure and invited the
private sector to set up their export-oriented businesses, even while the state continued to
own the land. But in India, land for SEZs will now be acquired and owned by private
promoters/developers (EPW, 2007).

In India, the central and the state governments should rush into forcibly acquiring
hundreds of thousands of hectares of arable lands in huge chunks and dole them out to
powerful industrial houses and real estate dealers at throw-away prices. (Sarma, 2007).

5.2 Loss of Agricultural Land- Food Security Problem

What land is to be acquired for the SEZ is again a problem. When government
acquires land, under provision of the Land Acquisition Act 1894, it is generally accepted
principle that as far as possible, cultivable land and land under crops is not acquired. But for
SEZs land under crops and even double and treble cropped land is under threat of acquisition
(Sawant, 2007). As SEZs will be built on prime agricultural land with serious implication for
food security (Aggarwal, 2006).

In fact today’s struggles in West Bengal at Singur; in Andhra Pradesh at Polepalli,

Visakhapatnam, Coastal Corridor and Nizampatnam are really the struggles of farmers and
people who are losing agricultural lands.

5.3 Rehabilitation and Resettlement Policy

Central to the SEZ scheme is the facile assumption that handing over thousands of
hectares of land cheaply to promoters of industry would automatically promote
industrialization and solve the nagging unemployment problem of the country overnight.

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Thus, the displacement is both physical and occupational. In coastal states like Andhra
Pradesh, some SEZs are located along the sea coast, cutting off fishermen’s access to the sea
from which the latter eke out their livelihood. In many places, agriculturists, artisans and
rural workers who have also lost their lands and homes face livelihood problems. The
government should recognise the inherent rights of the local communities to resources such
as land, water, minerals, forest wealth, etc. All these call for a paradigm change in the attitude
of the government (Sarma, 2007).

Though are some details about the approvals of SEZ etc., there is no mention of the
number of people to be displaced by these zones, leave alone how the government intends to
attend to the issues of displacement (Sampat, 2008).

5.4 SEZs become Centres of Real Estate

Misuse of land for real estate is easy. Promoters will get land cheaply and will make
their fortune out of real estate development and speculation indiscriminately. The minimum
required processing area is 35 per cent. The rest will be for residential, recreational facilities
(Aggarwal, 2006).

The real estate activity is regarded as integral to SEZ area, because the key concept of
an SEZ is the creation of a space rather than any particular activity. From the Central
government’s list of permitted activities in the non-processing areas of SEZs, we can gain a
sense of what is expected from the use of this space. This list includes restaurants, housing
and apartment, club houses, gymnasiums, shopping arcades and retail space, multiplexes,
schools, convention or businesss centres. And oddly enough swimming pools. Hotels are
allowed in all SEZs except , IT, biotech and gems SEZs (Gopalakrishnan, 2007).

5.5 Relocation of non-SEZ COs

There is a lot of difference in regard to tax concessions, several exemptions and

labour laws between SEZ area and non-SEZ area. Therefore, the companies of non-SEZ areas
shift to SEZ area to take advantage of the tax concessions etc. being offered there. From this
relocation, little net activity will be generated (Aggarwal, 2006).

5.6 Governance of the SEZs

The power over all three arms of the state – executive, elected institutions, and
judiciary – are centralised in the hands of the Development Commissioner and or the
developer company, as per the SEZ Act. The executive powers lie with Development
Commissioner and so again there is scope for bureaucratic red tape and corruption. As
regards judicial powers, there will be special courts set up for SEZs for both civil and
criminal matters. Legislative powers are diluted as there is no elected local government.
Local governance institutions are dissolved. Only industrial township authority is formed as
declared in Andhra Pradesh, Gujarat, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Orissa,
Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal. (Gopalakrishnan, 2007).

5.7 Uneven Growth

There is a strong possibility that SEZs will be set up in states where there is already a
strong tradition of manufacturing and exports (Table). This will aggravate regional

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disparities. The trend is already seen in the initial approvals. The share of the four most
industrialised states (TN, Karnataka, Gujarat and Maharashtra) in total approvals is 49.5 per
cent. Andhra Pradesh, Kerala and Haryana account for another 31.1 per cent of total
approvals. Thus seven states account for 80.6 per cent of approvals. Their share of in-
principle approvals is 63.8 per cent. On the other hand, industrially backward states of Bihar,
north-east and J and K do not have a single approval (Aggarwal, 2006).

List of SEZs as on 11th August 2008

S.No. State No. S.No. State No.
1 AP 56 19 Mizoram
2 Arunachal 20 Nagaland
3 Assam 21 Orissa 4
4 Bihar 22 Punjab 2
5 Chhattisgarh 23 Rajasthan 5
6 Delhi 1 24 Sikkim
7 Goa 3 25 TN 42
8 Gujarat 22 26 Tripura
9 Haryana 20 27 UP 12
10 Himachal 28 Uttarakhand 2
11 J&K 29 WB 8
12 Jharkhand 1 30 A&N
13 Karnataka 23 31 Chandigarh 2
14 Kerala 8 32 Dadra
15 MP 4 33 Daman
16 Maharashtra 35 34 Lakshadweep
17 Manipur 35 Pondicherry
18 Meghalaya
Total Approved 250
Source : www.sezindia.nic.in

5.8 Power of Private Finance and Investment Capital

SEZs enhance power of finance and investment capital direct and indirect ways. The
incentives being given to SEZs will add to the fiscal crisis of both the central and state
governments. The SEZs in certain sectors of capital, such as real estate, construction and
finance, will attract the speculative and volatile capital of Foreign Iinstitutional Investors
(FIIs), subjecting Indian economy to the ups and downs in the world. SEZ companies
practice the high degree of speculative, fraudulent or repressive activity to compete with non-
SEZ companies and so the survival of the latter is a problem.

As the government provides infrastructural facilities like water and electricity in

higher quantities as demanded by the developer in SEZ area, non-SEZ firms and companies
have to downsize their economic activities and collapse. SEZ companies adjust to more and
more concessions. Therefore future governments cannot reduce such concessions. A fragile
situation for the governments. Reduction in tax concessions and effective enforcement of
labour or environmental law lead to either withdrawal of capital in the case of speculative
investors or to slowdowns in activity.

Privatisation and disinvestment of public sector corporations – seizing resources

through increasing use of land acquisition powers to forcibly seize land or other resources in
favour of private foreign and domestic monopolists. Thus, the regime of accumulation under
neoliberalism is a combination of two processes: (i) a laissaiz faire economics that implies
greater freedom for capital to expand and for concentration of capital to occur; and (ii)

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accumulation through encroachment, driving accumulation through the use of force, state
policy and coercion(Gopalakrishnan, 2007).

The government becomes a ruthless promoter of the corporate entities in search of

higher growth, irrespective of how it affects the interests of the ordinary people. This is a case
of state-led corporatism, strengthening foreign capital and domestic monopoly capital
(Bhaduri, 2007).

In this context, David Harvey’s two concepts are relevant, viz., ‘accumulation by
dispossession’ and ‘imperialism of the capitalist sort’, as they may be realized through the
operation of SEZs. Harvey defines accumulation by dispossession as “What accumulation
by dispossession does is to release a set of assets (including labour power) at very low (and in
some instances zero) cost. Overaccumulated capital can seize hold of such assets and
immediately turn them to profitable use.”

Further, Harvey defines’ imperialism of the capitalist sort’ as a ‘contradictory fusion’

of two components: ‘territorial logic of power’—a logic, that is, in which command over a
territory and its human and natural resources constitutes the basis of the pursuit of power; and
‘capitalist logic of power’—a logic, that is, in which command over economic capital
constitutes the basis of the pursuit of power (Arrighi,2005).

6. Suggestions for Improving Situation in Land Acquisition

Forcible acquisition of land should be done away with. The land acquisition law itself
should be revoked, in view of its potential misuse. Decisions that involve displacement of
people should not be taken without prior consultation with the local communities. The
Constitution requires the gram sabhas to be fully involved whenever decisions that might lead
to dislocation of people are taken. Accumulation through encroachment is seen as classic
instance: The huge increase in mining activity, an extractive industry where policies ensure
that companies receive both land ore either for free or at very low royalty rates (Sarma 2007).

Wherever allocation of government acquired land to private developers is involved,

land should be leased-out not sold. As part of the compensation package, it would be useful
to ensure that the displaced persons are provided with the option of augmenting their human
capital and skill-set, so that they could be absorbed directly or indirectly as workers or
entrepreneurs in and around the SEZs (Majumdar, 2007).

We must oppose high growth that justifies developmental terrorism by the state on
behalf of the corporations. An alternative path of development can be evolved. Pro-people
growth in India has to be employment-driven. This can be achieved by programmes like
National Rural Employment Guarantee Act. For effective implementation of such
programmes, the panchayats are to be strengthened by genuinely decentralizing powers
(Bhaduri, 2007).

7. Struggles against SEZs in General

Karl Polyani, the perceptive commentator on 19th century capitalism described this as
a process of “great transformation” driven by the “double movement” of the market and the
state, a process in which the rules for the market were set mostly by the state. When the state

9
fails to play this role, the result is not a freer market and more freedom but growing
desperate rage of the poor, which must engulf all sooner or later (Bhaduri, 2007).

This is exactly what is happening in India. The people some states are fighting
against the SEZs. There were and have been struggles in Orissa (Kaling Nagar), Kerala,
Tamil Nadu, Karnataka, Andhra Pradesh, West Bengal and Maharashtra.

Very recently there has been struggle against the Singur SEZ project of Tatas in West
Bengal, which has led to Tata’s declaration of withdrawal from Singur on 3rd October, 2008.
In Visakhaptnam Bauxite Mining zone also there has been going on struggle of the people
not all responding to the so-called public hearing (Eenadu, 4th October, 2008).

On 26th September, Mr. Chiranajivi, Praja Rajyam Party, visited Polepalli village,
which is under proposed SEZ where the lands of the farmers were acquired by the AP
government. The farmers who lost land reported that the acquisition of land was forcefully
done (Eenadu, 27th September, 2008). On 27th September,2008, four political parties - Telugu
Desam Party (TDP), Communist Party of India-Marxist (CPI-M), CPI, and CPI (ML) - rallied
against Odarevu Nizam Patnam Industrial Corridor (ONPIC), as an SEZ, which covers
26,000 acres of land along the coastal belt in Coastal Andhra region (Eenadu, 28th September,
2008). On 29th September, 2008, TDP leader, Sri Yerram Naidu, MP, gave a statement that
they are opposed to take the cultivated land (Eenadu, 30th September, 2008).

8. Struggle against SEZ in Nandgram of West Bengal

In West Bengal, the government of Bengal had to scrap the SEZ at Nandigram after
the violence witnessed in Nandigram in the state of West Bengal (a Communist Party of India
(Marxist) ruled state) is a case in point. The people struggled protesting notification of land
acquisition of 25,000 acres of land under the LAA 1894 for an SEZ towards a chemical hub
slated for the Salim group of Indonesia. Now, we present the struggle against Nandigram
SEZ in some detils.

8.1 Protest at Nandigram SEZ

On 3rd January, 2007, Laxman Seth, MP (Lok Sabha) of CPI (M) party, the
chairman, Haldia Development Authority (HAD), sent notices to villages identified to be
acquired for Nandigram SEZ. CPI (M) cadres who possessed land in those villages submitted
consent letter to the HDA. Meeting at Kalicharanpur (District Administration) Nandigram
turned into protest.

8.2 Villagers Protest at Panchayat Kalicharanpur - 3rd January 2007

Block officials were present on 3rd January 2007. The meeting was intended to serve
notice to the peasants or pass on information about the acquisition of land. 25-30 villagers
gathered around the Panchayat. They got agitated as nothing was clear to the villagers. They
questioned the purpose of the meeting – also abused the intention of acquiring the land. They
raised queries. They questioned the officials but no satisfactory answers could be received.
The villagers came in crowds. Police began to beat them. Police opened fire and 3 people
injured. When the crowd increased, police fled from the place. But WB government did not
come out with a statement that there was no intention to acquire land.

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 On 4th January 2007, the villagers and members of Bhumi Uched Birodh Committee
(BUBC) wanted to breach all roads into Nandigram interior. Boulders were placed at many
places. Sharp branches were placed in some narrow lanes. Seeing this CPI (M) cadre feared
and went out of the villages. People requested the CPI (M) cadre to come back and stay with
them inside the village, as they did not intend to harm them (CPI-M cadre). But people or
agitating peasants took pledge not to allow any state machinery and revenue, police, and
panchayat raj officials to enter the interior of Nandigram Block. People kept vigil round the
clock. On 4th and 6th January 2007, people were on vigil.

8.3 Incidents of 6-7 January 2007

Benay Konar, Senior CPI (M) leader; Laxman Seth, MP, CPI (M); Ashok Guria,
Secretariat Member, CPI (M) of East Midnapore District, propagated that TMC and other
political forces were involved in this event. They decided for an armed attack.

Sonachura (one side) and Tekhali (other side) are the opposite sides of the Bonga Bari
canal near Talpathi Bridge. About 15,000 people of BUBC were gathered on Sonachura side.
A camp of CPI (M) cadre was there on Tekhali side. CPI (M) cadre started hurling bombs
toward the people gathered at Sonachura outskirts. The people of BUBC wanted to beat back
the CPI (M) cadre and police, if they dared to cross the bridge.

Around 3.30 am on 7th January , i.e., 6th January night, guns of CPI (M) cadre in
police uniform start blasting which killed 3 of the vigilants and injured not less than 20
according to some people, who claimed to have seen. But some said, only 6 killed and some
said only 8 killed. CPI (M) central weekly organ 8-14 January, claimed that 5 of its cadre
were killed: (1) Biswajt Maity (belonged to people agitating), (2) Sankar Samanta (people
killed him, but CPI (M) reported as murdered by TMC-Maoist combine), (3) Bhunder
Mandal (not a correct statement), (4) Sudeb Mandaql (not a correct statement), and (5)
Fahim Bhule (not a correct statement).

Sankar Samanta was chased, caught and axed to death and the body was burnt down
by the people on 6th January night. Sankara Samanta, with AK 47 rifle in his hand, led 250
CPI (M) cadre opened fire on the 15,000 strong persons (agitating) where 3 killed, 20
injured. As per the people’s report to AIFFC (2007), the fact is that the following three (3)
persons among the agitating people of BUBC were killed in the guns blazing attack by CPI
(M) cadre: (1) Bharat Mandal, aged 35 years - agricultural labour, 2) Sheik Saleem, aged
21 years - tailor, and (3) Biswajit Maity, aged 14 years - 8th class student.

8.4 Looting on 18th February 2007

CPI (M) cadre, nearly 200, holding CPI (M) flags looted many shops in Tekhali
village bazaar in broad day-light, while 100 police were silent spectator on 18th February,
2007. On enquiry by the AIFFC (on the day of their visit), SHO, Nandigram reported that
on 18th February, 2007, there were no sufficient police force, as police were sent to some
other place (AIFFC, 2007).
.
8.5 Medha Patakr’s Visit on 25th February, 2007 - Desperate Intolerance of CPI (M)

On 25th February, 2007, Binay Konar (a senior CC member of CPI-M) gave a call to
the women to show their naked buttocks to Medha Patkar, when she would be visiting

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Nanidigam. It is a clear sign of desperate intolerance. Women rejected this indecent call but
young male CPI (M) cadre at Hulnimore lowered their pants and under-wears and showed
their nasty buttocks to Medha Patkar. Not only this, Medha Patkar was physically pushed
from all sides. Patkar said that it was a great degeneration. In her 15 years Narmada Bachao
Andolan , she had never faced such an ugly experience even from Sangh Pariwar forces
(AIFFC, 2007).

8.6 Firing at Nandigram on March 14, 2007

After 7th January 2007, the government also intended to strike back on the Nandigram
people. It was planned to take place on 13th March. Governor of the state, who was in
Chennai, came to know about the imminent aggression and asked the government officials to
show restraint. On 14th March the operation started at 9.45 am, with indiscriminate firing by
the armed police and armed goons and nobody from outside could go to Nandigram in the
next 72 hours. On March 14th , 244 persons, including 57 women, suffered serious physical
injuries; 348 women suffered sexual atrocities of different kinds, including 11 rape cases; 14
persons including 2 women were killed; and 4 persons had been missing since March 14th
(Bandyopadhyay, 2007).

On PIL petition, the Calcutta High court directed CBI enquiry, which found ample
evidence of indiscriminate firing from both the police firearms and civilian firearms. They
also recovered 315 sporting rifles. Further, it was demonstrated by the CBI’s limited enquiry
that all the miscreants were CPI (M) supported or hired by them. But High Court also could
not deliver judgement till November 16th 2007, though formal hearing ended in July. This
delay ultimate led to further attack on Nandigram people on 10-11th November, 2007.

8.7 Protests against March 14 Killings from Intellectuals and Activists

In regard to Kaling Nagar violence, Navin Patnaik simply expressed his apologies.
But, Budha Dev after the violence of March 14, 2007, began to say that the incidents in
Nandigram were instigated by the other political parties and so they were responsible. But
there are lot of protests from the intellectuals and activists.

1. Historians Sumit Sarkar, Tanika Sarkar, and Pradip Kumar Datte, refused to keep the
Ravindra Puraskar that was awarded by Paschim Vanga Bangla Academy. 2. Prof.
M.N.Vijayan criticized capitalist path of CPI (M) (He was topmost Journalist of CPI (M) till
2004 when he resigned). 3. Nabaroon Bhattacharya eminent novelist and cultural activist
refused the Bankim Award due to Nandigram. 4. Bratya Basu (eminent play wright and
director) compared Nandigram incident as another ‘Jalianwalabag’, a genocide. 5. Amar
Deo Sharma and Sanjoy Tyagi, President and Secretary (respectively) of Delhi University
Teachers Association, said “Nandigram is part of a pattern of events in India where
‘industrialization’ is taking place for the benefits of the corporate houses.” 6. Totally 48
teachers of Jadavpur University said “We find this action planned and executed in tandem by
the state machinery and the ruling party, to be a betrayal of the trust the people of West
Bengal put in the elected authorities.”

A People’s Tribunal consisting of a retired high court chief justice and social activists,
documented this, after recording 174 depositions by the victims. Its chilling conclusions
show close Police-CPI (M) collusion.. The motive was to ‘teach SEZ opponents a lesson.

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Mr. C. Bhaskar Rao, who is the Genral Secretary, OPDR-AP, as convener of All India Fact
Finding Committee (AIFFC) visited Nandigram on February 28, 2007 and Singur on March
1, 2007 gave its report, on the same lines.

Editorial Main Stream, March 16-22, 2007 (p.2) reported: “Indeed March 14 at
Nandigram has few parallels in independent India and it is no exaggeration to compare it with
“Jalianwalabag.” “ The police cold-bloodedly killed many people by firing not on the feet,
but chest upwards and even on the head.”

Further, Governor, Gopal Gandhi (Mainstream, March 16-12, 2007; p.3) expressed
his view as “Force against anti-national elements, terrorists, extremists, insurgents is one
thing. The receiving end of the force used today does not belong to that order”.

8.8 Operation Reconquest of Nandigram by CPI (M) – 10th November, 2007

Calcutta High Court acted upon Public Interest Litigation and completed its hearings
by July 2007, on the violence of March 14, 2007, at Nandigram. Judgment was given on
November 16, 2007. It ordered that police firing on March 14, was unjustified and violative
of article-21 of Indian constitution. Court asked CBI to complete comprehensive report.
Court rejected all the arguments of the state government and rejected stay order on HC’s
order and enquiry. It is said, “ if the order had come prior to the autumn recess of the High
Court perhaps the second wave of the more horrendous bloody events could have been
avoided.” BUPC did not cow down. It stiffened their resistance. The CPI (M) and
government of West Bengal could not tolerate such impudence from the unarmed organized
peasants who were their loyalists for so many decades.

The party and government planned to “reconquest” Nandigram. From late

September, 2007, party leaders at all levels started planning a bloody offensive to recapture
Nandigram, in collusion with the police, and the preparations made are:

1. The CPI (M) propagated that their supporters (to the extent of 15,000) were driven
(though scaled down to 3,500), by the BUBC, TMC, and Jamat-e-Hind (which was
dropped later, not willing to face resentment from the minorities). Maoist
involvement was falsely propagated.
2. Mobilization of known assassins, killers and murderers on payment: (i) Rs, 12000 per
night and (ii) Rs. 2,00,000 per kith and kin if life lost.
3. Six pronged attack executed to avoid resistance of the BUBC.
4. The whole area was cordoned off to prevent ingress or engress any “out siders”
5. Deadly weapons AK 47s and AK 56s, Ichapore rifles were supplied.
6. Gang leaders in charge of different sectors, some CPI (M) leaders were deployed as
“political commissars.”

The operation conquest was well planned and executed accordingly. On November 3-
4, 2007, all roads leading to Nandigram were blocked, by slogan shouting CPI (M) cadres.
TMC leader, Mamata, had to be kept 70 kms. away from Nandigram. Medha Patkar was not
allowed to travel into the block. No media person was allowed except their TV channel.

The operation was being resisted by BUPC volunteers. Here the BUBC made a major
tactical error. BUPC wanted to take procession on November 10, 2007 with their supporters
without any arms (not even lathis) towards the peripheral villages. Just as in absolutely

13
military manner, CPI (M) cadres ambushed these two processions, by killing nearly 100
persons, injuring over 150 persons and capturing about 800 villagers. Dead bodies were
carried to a community funeral pyre, and even injured persons were carried and burnt alive.
“Their savagery far exceeded any recorded incident of cruelty and brutality of the middle
ages.” Captured 800 persons were used as human shield by the CPI (M) cadre and as a token
of reconquest they planted red flags all over the area. Major Aditya Bera (rtd.) was killed
brutally because he was suspected as the planner of BUBC volunteers.

9. Conclusion

Special economic zone (SEZ) concept has been introduced to expand export-oriented
production. Attraction of foreign direct investment and export promotion are the two main
purposes of the SEZs. Thus, SEZs are geographical spaces of free trade and warehousing.
For this, governments have to offer tax concessions and many other incentives through
provision of land, water, electricity and other facilities at subsidized prices. The land
acquisition is made by the governments (state and central), by exercising the “public
purpose” provisions.

The concessions, subsidies and exemptions being extended by the governments would
certainly generate fiscal crisis for the state and central governments. Further, the non-SEZ
companies demand for the extension of benefits on par with SEZ area. Further, to attract the
SEZs, labour laws are being amended by incorporating flexible laws (without minimum
wage, AND with fire and hire clauses) which can reduce the SEZs into places of wage
slavery in new forms.

A lot of land is being acquired by the governments to keep the lands at the disposal of
the Developers of the SEZs. But, proper rehabilitation and resettlement (R&R) schemes have
not been prepared and particularly the people being affected have not been involved to
voluntarily surrender their lands. It is possible only when there is a participatory role for the
farmers and villagers, if they have to be convinced. The developers are simply being
provided with space without proper mechanism to regulate them so as to make the land
properly utilized. As a result, there is a lot of scope for the land being diverted to ‘real
estate’ scams. It is a type of accumulation by dispossession, in favour of the foreign and
domestic monopoly capitalists.

As the people are not taken into confidence, the forceful evictions and involuntary
surrender of lands occurred. The people are badly affected and have started struggling either
with the support or without the support of opposition political parties. Throughout many
states people’ struggles were launched or are still being continued. In West Bengal, after
people’s struggle the Nandigram SEZ was scrapped; and the Singur project has been
declared withdrawal.

Andhra Pradesh, which has 56 approved SEZs, stands at the top among all the states
in India. In AP, the struggles are going on in Polepalli, Rajamundry, Viasakhapatnam and
throughout coastal corridor (inclding Nizampatnam Port). Yet, the struggles have not taken
such dimension as in West Bengal. The reason for not being succeful in struggle against the
SEZs in AP is rightly pointed out by the TDP leaders, when were asked why they were not in
a position to fight against SEZs as was fought in in Nandigram and Singur. They replied that
in West Bengal there were only a few SEZs and so the opposition parties could concentrate
and fight against the government and ultimately the government gave up the SEZ at

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Nandigram on its own and by the developers themselves at Singur (Eenadu, 30th September,
2008).

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Rajagopalan, T.N.C (2008), “SEZ Policy Sould be Allowed a Reasonable Run”, Business Standard,
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Sampat, Preeti (2008), “Special Economic Zones in India”, Economic and Political Weekly, July 12-18.

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