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Analysis

Special Economic Zone in Gujarat: What is in it for Labourers and Farmers?

The state of Gujarat has always known for its business conducive environment and an affluent industrial sector. It is one of the largest contributors of income, employment and investment to India. However, despite having larger industrial sector and high gross state domestic product, state’s working environment for labour/workers has been subject to the wide-spread criticism. In order to produce goods at lower prices, firms usually attempt to keep the wages as low as possible. Moreover, the availability of cheap labour at a location attracts a significant amount of domestic as well as foreign investment. So in order to draw a considerable investment from the enterprises, Gujarat state has often amended the labour laws in favour of business and opposite to the interest of workers.

In 2004, the state has enacted Special Economic Zone (SEZ) Act with the objectives of generation of additional economic activities, promotion of export and investment from domestic as well as international sources, generation of employment and infrastructure. These objectives are shown to be achieved through providing various financial and non-financial benefits to the units located in SEZs. Financial benefits include exemption from all kinds of taxes, cess and duties, while the non-financial benefits include good infrastructural facilities, supply of electricity, water, road, gas etc. According to the Commissionerate of Industries (Gujarat), there are 60 SEZs in the state in 2015 (Table 1).

Table 1: District-wise Number of SEZs and Area Covered in Gujarat

Districts No. of SEZs Area in Ha.
Kachchh 14 11924.89
Bharuch 7 6247.00
Jamnagar 2 619.00
Ahmadabad 17 3177.26
Valsad 2 1120.79
Surat 4 447.54
Vadodara 5 364.35
Amreli 2 261.67
Gandhinagar 7 261.31
Total 60 29,423.81

Source: Department of Commerce, GoI, 2014.

…workers are working at very low wage rates ranging from 4000 to 6000 per month and are often asked to work more than eight hours without the extra payment…50 per cent workers do not have safety uniforms, 80 per cent suffer from health issues and 16.2 per cent had an accident at the site…

SEZ and Labour

The labour laws in the state of Gujarat have always been formulated to benefit the capital at the cost of labour. For instance, amendment of the Industrial Disputes Act in 2004, in the name of labour market flexibilities, allowed the firms located in SEZ to dismiss workers without the consent of government with a short notice of one month only. Moreover, the scope and coverage of industrial dispute has also go changed by excluding the issue of ‘termination of service of an employee’ from the ambit of SEZ. The Contract Labour (Regulation & Abolition) Act 1970 states clearly that contract workers cannot be employed in permanent and perpetual activities, but despite this, a significant number of contract workers have been employed in SEZs which carry permanent and perpetual activities.

A research carried out at the economics department of Central University of Gujarat in 2015 titled ‘Labour Welfare Dynamics with Reference to Special Economic Zone: A Case Study of Gujarat[1]’ shed lights on the exploitative nature of work at SEZs in Gujarat. Accordingly, workers are working at very low wage rates ranging from 4000 to 6000 per month and are often asked to work more than eight hours without the extra payment. This is because the Minimum Wages Act does not offer any protection to the contract workers. The researcher has done a field survey from 7 locations viz. Electronic SEZ (Gandhinagar), Pharmez (Ahmadabad), SEEPZ (Surat), Apparel Park SEZ (Surat), SEZ (Kandla) and Mundra SEZ. Interview of 45 respondents from each location revealed that around 93 per cent of total workers are asked to do overtime. More repulsively it was found that around 86 per cent of respondents have actually forced to do overtime. This indicates that enterprises located at SEZ utilise the workers more than their physical capabilities which leads to the health problems of workers. Moreover, the lack of safety measures at the site also increases the risk for the workers.

…fertile land has been acquired and remains unused over the period of time. As much as 48 per cent of land acquired under SEZ Act in the state of Gujarat remains unused..

The research has revealed that around 50 per cent workers do not have safety uniforms, 80 per cent suffer from health issues and 16.2 per cent had an accident at the site. However, firms do provide the safety measures, medical and other facilities to the workers but these turned out to be outdated and many of the workers are unsatisfied with the given facilities. Moreover, a large chunk of respondents are not satisfied with the statutory ambulance room facilities, canteen facility, Statutory First-Aid Box Facility, statutory restroom facilities, housing facilities etc. It has also been found that many of the respondents are oblivious about various government welfare policies like, Provident Fund (The Employees Provident Funds and Miscellaneous Provisions Act, 1953), Insurance Benefit (The Employees State Insurance Act, 1948), Gratuity Benefit (The Payment of Gratuity Act, 1972), Maternity Benefit (The Maternity Benefit Act, 1961) and Accident Benefits (The Workman’s Compensation Act, 1923).

…from the suffering of farmers through land acquisition to the pathetic working conditions for labourers in the zone, SEZ do not seems to be a promising model of development…

SEZ and Land Acquisition

One of the major drawbacks of SEZs is the process of land acquisition for the private sector development. There have been many such incidents in the state of Gujarat where the fertile land has been acquired and remains unused over the period of time. As much as 48 per cent of land acquired under SEZ Act in the state of Gujarat remains unused (TOI, 2015)[2]. The new land acquisition Act came into force on January 2014, clearly states under its section 24 (2) that lands acquired under the previous 1894 Land Act (old act) five years or beyond before the new Act came into force such land acquisition will be treated as lapsed. Moreover, it also states that if the compensation is not given against the acquired land for private purposes, it should be returned to the farmers.

An interview of Punjabhai Modhwadia of Jamnagar district conducted by livemint (2015)[3], who says that “We take crops three times a year and it yields an income of about Rs.20 lakh annually. This farm has supported me and my family for years. They want us to leave. I ask, why should I leave now? I don’t want money. I want to live on my land”. The land was acquired in the year 2008 where Modhwadia still has the possession and according to the new rule the land should be kept by the farmers. The land acquisition in the Jamnagar district involved 6 villages of fertile land. However, the Supreme Court in line with the Gujarat high court has didn’t stayed the land acquisition drive. Similarly in the name of Special Investment Region in 2007, Gujarat government has acquired 920 square km of land most of it belonged to the agriculture where 22 villages and 15,000 families were living in Dholera. However, it has been 10 years since the land was acquired but this project is still in construction stage.

SEZ is a good idea for the industrial and export development. However, from the suffering of farmers through land acquisition to the pathetic working conditions for labourers in the zone, SEZ do not seems to be a promising model of development, especially in the state of Gujarat. But unfortunately, the state has been on the path of this model of development where corporate sector is at the ‘getting all the benefits side’ and farmers & labourers are forces to live pitiable life. A number of families have lost their homes and forced to migrate to other places. Moreover, most of the land allocated to the SEZ still remains unused.

Footnote

[1] Ph.D. thesis of Parwez, S. (2015), retrieved from http://shodhganga.inflibnet.ac.in/handle/10603/98704

[2] http://timesofindia.indiatimes.com/business/india-business/Over-50-of-land-acquired-for-SEZs-between-2006-and-2013-lie-unused/articleshow/46995184.cms

[3] http://www.livemint.com/Politics/tFk0ccWGTTIuJKjPylY6IK/Jamnagar-farmers-clutch-at-2013-law-to-get-their-land-back.html

The AuthorTareef Husain, Ph.D. (Economics),  Central University of Gujarat, Gandhinagar, E-mail: tareefhussain.amu@gmail.com

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