labels: industry - general, infrastructure - general
Sonia cautions state governments against diversion of farmlands to SEZs news
23 September 2006

Mumbai: Congress president Sonia Gandhi has joined the chorus against special economic zones (SEZs). Addressing a conclave of state chief ministers in New Delhi, she advised caution on diversion of farmland for non-agricultural purposes. She also called for "proper compensation" to farmers in case of land acquisition.

"Prime agricultural land should not normally be diverted to non-agricultural uses. Industry requires land no doubt. But this must be done without jeopardising our agricultural prospects," she said.

"We will be adding 300 million to our population in the next 20 years. Agriculture must be the focus of the plan. Without massive public investment and without far reaching reforms in the public delivery system, agricultural growth at the scale we need cannot take place," she cautioned.

Sonia said farmers must be made stakeholders in projects involving diversion of their land. "Farmers must get proper compensation when their land is purchased," she said. "Could farmers also not become stakeholders in the projects that come up on the land acquired from them?" she asked.

Her remarks come in the wake of rising opposition to SEZs and contoversies involving Reliance's Haryana project and the Anil Ambani-contovelled ADAG's Dadri power project.

IMF's chief economist Raghuram Rajan has recently criticised the government's policy of offering "perverse economic incentives" as the main cause behind the mad rush for SEZs. Even finance minister P Chidambaram had criticised the scheme. There has also been widespread criticism in the press. 

This is in contrast with the widespread and advantageous use of the special economic development zones idea in China. Special economic zones have largely aided China's burgeoning exports. In fact, China last week approved the setting up of eight special zones to make cars and car components for export. These zones will also receive preferential loans and export-tax rebates.


also see : SEZ Policy: Whose 'Special Economy'?

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Sonia cautions state governments against diversion of farmlands to SEZs