ABSTRACT

Inspired by the success of the Special Economic Zones (SEZs) in China, the Indian government introduced a similar policy through the ratification of the SEZ Act in June 2005. This policy consists of extending sweeping economic concessions to foreign as well as domestic corporate developers intending to set up either single or multiple product SEZs. According to this policy, the land needed for these SEZs would be acquired by the government for the private corporate promoter. The SEZs would also enjoy several other benefits such as exemptions from a slew of taxes, duties, being devoid of effective labour laws etc.

The aim of adopting this policy was to promote foreign direct investment (FDI), flow of foreign exchange and to generate industrialization and employment. That substantial benefits, in terms of foreign exchange inflows, higher employment and general growth, can accrue to the country through this kind of development is quite certain. However, the distribution of these is most likely to be skewed. On the one hand are the promoters of SEZ, the companies that will operate in these and make profits and the people who will live and work here amidst world class amenities. On the other hand are the farmers whose lands will have to be acquired to build these world class SEZs. These farmers will lose the only income generating asset that they have and get only a one time payment. Most of these farmers would be unable to use this to generate income. This skewed distribution of the potential benefits is reflected in the responses of the two groups.

The private corporate sector has responded by flooding the government with applications for setting up such SEZs. The farmers who are to lose their land are protesting against this SEZ policy. However, interestingly, some farmers’ groups from different places have given an innovative response to this policy. In several places, the farmers whose lands are being sought to be acquired for this purpose are refusing to sell their land to the corporate promoters and are instead taking up co-operative income generating projects on their land, on their own.

This paper looks at some of these emerging co-operative SEZs, in rural areas in India. It attempts to study these for their viability and to understand what factors can lead to the success of such endeavors. Specifically, it attempts to focus on one such co-operative venture in a village near Pune which was meticulously planned by the local farmers and was also approved for implementation by the State government. The paper is being researched on the basis of literature survey and interviews with the relevant people

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