An Analysis of the Feasibility of Private Land Assembly for Special Economic Zones in India

Abstract

India has used export processing zones as a development strategy since the mid 1960s. The performance of these zones did not meet expectations and, in 2001, the government changed the rules and the name, and recast them as special economic zones. Indian special economic zone policy was formulated to facilitate the private development of big industrial townships. This is a significant departure from the typical export zone model, where governments usually develop the zone and invite entrepreneurs to start firms within it. However, the zone policy is unlikely to achieve its objective because of land acquisition problems. This paper analyses the effect of land laws such as land ceiling and land use clauses, and the political nature of land dealings in the context of special economic zone development in India, and concludes that private land acquisition is not possible with the current structure of land laws in India, and that this is a primary problem for the private development in special economic zones in India.

Get full access to this article

View all access options for this article.

References

Aggarwal

(2004) Export processing zones in India: analysis of the export performance. Working Paper No. 148, Indian Council for Research on International Economic Relations (ICRIER), New Delhi.

Aggarwal

(2005) Performance of export processing zones: a comparative analysis of India, Sri Lanka and Bangladesh. Working Paper No. 155, Indian Council for Research on International Economic Relations (ICRIER), New Delhi.

Aggarwal

(2007) Impact of special economic zones on employment, poverty and human development. Working Paper No. 194, Indian Council for Research on International Economic Relations (ICRIER), New Delhi.

Audirac

(2003) Information-age landscapes outside the developed world, Journal of the American Planning Association, 69(1), pp. 16–32.

Baboo

(1991) State policies and people’s response: lessons from Hirakud Dam, Economic and Political Weekly, 26(41), pp. 2373–2379.

Banerjee-Guha

(2008) Space relations of capital and significance of new economic enclaves: SEZs in India, Economic and Political Weekly, 43(47), pp. 51–59.

Bertaud

(2002) Bangalore: note on land issues ( http://alain-bertaud.com ; accessed March 2010).

Bertaud

(2004) Mumbai FSI conundrum: the perfect storm: the four factors restricting the construction of new floor space in Mumbai ( http://alain-bertaud.com/AB_Files/AB_Mumbai_FSI_conundrum.pdf ; accessed March 2010).

Bhaduri

(2007) Development or developmental terrorism?, Economic and Political Weekly, 42(7), pp. 552–553.

10.

Business Line Bureau (2007) POSCO project: Orissa taking steps to solve land problems, The Hindu Business Line, 27 March ( http://www.thehindubusinessline.com/2007/03/27/stories/2007032703260200.htm ).

11.

Business Line Bureau (2008) Raigad votes against SEZ in referendum, The Hindu Business Line, 23 September ( http://www.thehindubusinessline.com/2008/09/23/stories/2008092352471000.htm ).

12.

Business Standard Reporter (2010) R-Infra wins Rs 11,000 cr Mumbai Metro-II project, Business Standard, 21 January ( http://www.business-standard.com/india/ ).

13.

Desrochers

(1998) A geographical perspective on Austrian economics, Quarterly Journal of Austrian Economics, 1(2), pp. 63–83.

14.

DN (1989) Landlords as extensions of the state, Economic and Political Weekly, 24(4), pp. 8179–8183.

15.

Dowell

Leaf

(1991) The price of land for housing in Jakarta, Urban Studies, 28, pp. 707–722.

16.

D’Souza

Mukhopadhyay

Kothari

(1998) Re-evaluating multi-purpose river valley projects: a case study of Hirakud, Ukai and IGNP, Economic and Political Weekly, 33(6), pp. 297–302.

17.

Fernandes

(1998) Land Acquisition (Amendment) Bill: rights of project-affected people ignored, Economic and Political Weekly, 33(42/43), pp. 2703–2706.

18.

The Financial Express (2007) Naveen reluctant to use force to acquire land for Posco project, 16 April ( http://www.financialexpress.com/news/naveen-reluctant-to-use-force-to-acquire-land-for-posco-project/104525/ ).

19.

Gopalakrishnan

(2007) In the name of growth: the politics and economics of India’s special economic zones. A study prepared for the Council for Social Development, New Delhi.

20.

Goswami

(2008) Why only a few will make it. Seminar No. 582 (http://www.india-seminar.com/2008/582/582_omkar_goswami.htm).

21.

Guyot

(1971) The politics of land: comparative development in two states of Malaysia, Pacific Affairs, 44(3), pp. 368–389.

22.

Haridas

(2000) Interview with Murasoli Maran, Rediff On The Net, 31 March ( http://www.rediff.com/money/2000/mar/31maran.htm ).

23.

The Hindu (2011) End of reliance SEZ? 19 February ( http://www.thehindu.com/2011/02/19/stories/2011021968111800.htm ).

24.

Hoekman

B. M.

Kheir-El-Din

(Eds) (2000) Trade Policy Developments in the Middle East and North Africa. Washington, DC: World Bank.

25.

Hospers

(2003) Creative cities: breeding places in the knowledge economy, Knowledge Technology and Policy, 16(3), pp. 143–162.

26.

Huang

(2003) A room of one’s own: housing consumption and residential crowding in transitional urban China, Environment and Planning A, 35(4), pp. 591–614.

27.

Jacobs

(1969) The Economy of Cities. New York: Vintage Books.

28.

Jain

A. K.

(2003) Making planning responsive to, and compatible with, reforms, Cities, 20(2), pp. 143–145.

29.

Jog

(2009) Mumbai SEZ puts Raigad project on hold, The Financial Express, 9 June ( http://www.financialexpress.com/printer/news/473253/ ).

30.

Kelly

P. F.

(2003) Urbanization and the politics of land in the Manila region, Annals of the American Academy of Political and Social Science, 590, pp. 170–187.

31.

Kennedy

(2007) Regional industrial policies driving peri-urban dynamics in Hyderabad, India, Cities, 24(2), pp. 95–109.

32.

Kumar

(1989) India’s Export Processing Zones. New Delhi: Oxford University Press.

33.

Kundra

(2000) The Performance of India’s Export Zones. New Delhi: Sage.

34.

S. M.

(2000) Housing consumption in urban China: a comparative study of Beijing and Guangzhou, Environment and Planning A, 32, pp. 1115–1134.

35.

Lin

G. C. S.

S. P. S.

(2005) The state, land system, and land development processes in contemporary China, Annals of the Association of American Geographers, 95(2), pp. 411–436.

36.

Madani

(1999) A review of the role and impact of export processing zones. Policy Research Working Paper No. 2238, World Bank, Washington, DC.

37.

Menon

(2007) Farmers take to streets against SEZ in Raigad, The Hindu, 24 March.

38.

Menon

S. N.

Mitra

S. K.

(2009) Special economic zones: the rationale. Occasional Paper No. 16, Centre for Policy Research, New Delhi.

39.

Mitra

(1990) Land price in Indian cities: dimensions and determinants of change, Economic and Political Weekly, 25(50), pp. 2723–2729.

40.

Morris

Pandey

(2007) Toward a framework of land acquisition in India, Economic and Political Weekly, 42(22), pp. 2083–2090.

41.

Mukhopadhyay

(2001) Do De Novo SEZs make sense: learning lessons from China and India. Draft prepared by IDFC.

42.

Mukhopadhyay

(2009) The promised land of SEZs. Occasional Paper No. 17, Centre for Policy Research, New Delhi.

43.

Mukul (1996) Building from above, displacing from below: land development in Delhi, Economic and Political Weekly, 31(5), pp. 259–261.

44.

Nair

(1996) Predatory capitalism and legalised landgrab: Karnataka land reforms, Economic and Political Weekly, 31(5), pp. 251–252.

45.

Negi

J. S.

(2006) Urban land price scenario of Chennai. Report, Industrial and Economic Planning Division of the Town and Country Planning Organization, Government of India.

46.

Palit

Bhattacharjee

(2008) Special Economic Zones in India: Myths and Realities. New Delhi: Anthem Press.

47.

Patkar

Singh

(2007) Urban renewal: at whose cost?, Economic and Political Weekly, 42(11), pp. 926–927.

48.

Phillips

D. R.

Yeh

A. G. O.

(1989) Special economic zones, in: Goodman

D. S. G.

(Ed.) China’s Regional Development, pp. 112–134. London: Routledge.

49.

Rabbani

F. A.

(1980) Economic and social impacts of export processing zones in Asia. Asian Productivity Organisation, Tokyo.

50.

Radhakrishnan

(1990) Land reforms: rhetoric and reality, Economic and Political Weekly, 25(47), pp. 2617–2621.

51.

Rafferty

(2010) Failings of Indian infrastructure, The Japan Times, 3 September.

52.

Rao

J. P.

(1998) Tribals’ struggle against land alienation, Economic and Political Weekly, 33(3), pp. 81–83.

53.

RBI (Reserve Bank of India) (2008) Handbook of Statistics on Indian Economy. Mumbai: RBS.

54.

Sampat

(2008) Special economic zones in India, Economic and Political Weekly, 43(1), pp. 25–30.

55.

Sarkar

(2008) Mahindras cash in on early SEZ appeal, Business Standard, 29 July.

56.

Sarma

E. A. S.

(2007) Help the rich hurt the poor: case of special economic zones, Economic and Political Weekly, 42(21), pp. 1900–1901.

57.

Seetharam-Sridhar

(2010) Impact of land use regulations: evidence from India’s cities, Urban Studies, 47(7), pp. 1541–1569.

58.

Seshadri

Storr

V. H.

(2010) Knowledge problems associated with creating export zones, The Review of Austrian Economics, 23(4), pp. 347–366.

59.

Sharma

N. K.

(2009) Special economic zones: socio-economic implications, Economic and Political Weekly, 44(20), pp. 18–21.

60.

Shaw

Satish

M. K.

(2007) Metropolitan restructuring in post-liberalized India: separating the global and the local, Cities, 24(2), pp. 148–163.

61.

Sivam

(2002) Constraints affecting the efficiency of the urban residential land market in developing countries: a case study of India, Habitat International, 26, pp. 523–537.

62.

Srinivas

(1991) Land and politics in India: working of Urban Land Ceiling Act 1976, Economic and Political Weekly, 26(43), pp. 2482–2484.

63.

Thakkar

(2008) Mundra: the birth of a modern city, The Economic Times, 8 November ( http://economictimes.indiatimes.com ).

64.

Vijayabaskar

(2010) Saving agricultural labour from agriculture: SEZs and politics of silence in Tamil Nadu, Economic & Political Weekly, 45(6), pp. 36–44.

65.

Wang

(2009) The economic impact of special economic zones: evidence from Chinese municipalities. London School of Economics ( http://se.shufe.edu.cn/upload/_info/42910_1001270253311.pdf ).

66.

Wang

Y. P.

Murie

(1999) Commercial housing development in urban China, Urban Studies, 36, pp. 1475–1494.

67.

Warr

P. G.

(1984) Korea’s Masan free export zone: benefits and costs, The Developing Economies, 22, pp. 169–172.

68.

Warr

P. G.

(1987) Export promotion via industrial enclaves: the Philippines’ Bataan export processing zone, Journal of Development Studies, 23(2), pp. 220–241.

69.

Wong

K.-Y.

Chu

D. K. Y.

(1984) Export processing zones and special economic zones as generators of economic development: the Asian experience, Geografiska Annaler, B, 66(1), pp. 1–16.

70.

World Bank (1993a) China: urban land management in an emerging market economy. World Bank, Washington, DC.

71.

World Bank (1993b) Housing: enabling markets to work. World Bank, Washington, DC.

72.

(1996) Changes in the structure of public housing provision in urban China, Urban Studies, 33(9), pp. 1601–1627.

73.

(1999) Pioneering Economic Reforms in China’s Special Economic Zones. Aldershot: Ashgate.

74.

Yeung

Lee

(2009) China’s special economic zones at 30, Eurasian Geography and Economics, 50(2), pp. 222–240.