The Politics of India's Special Economic Zones
This is the website for a collaborative research project on Special Economic Zones in India. It has two main research themes. The first concerns the establishment of SEZs, particularly the nature and composition of movements that arise in opposition to specific SEZs, and the responses of state agencies and other elements of the wider political system such as political parties, elected politicians, and non-governmental organizations. The second centers upon how SEZs will be governed, their links to wider processes of urban restructuring, and the uncertainties concerning the relationship between SEZs and the many overlapping jurisdictions within which they are situated. This project is administered by the Centre de Sciences Humaines (CSH, Delhi), and conducted in association with the Centre for Policy Research (CPR, Delhi) and Hunter College (New York) and is supported by the Ford Foundation, Delhi.
India's Special Economic Zone Act 2005 has catalyzed an enormous response from private-sector developers and state government officials eager to attract investment to their jurisdictions. More than 550 Special Economic Zones (SEZs) have been approved since the Act's provisions came into force in 2006.
India's SEZ Act - both its substantive provisions and its actual implementation in the form of concrete projects - has spurred other reactions as well, notably immense protest action in the immediate vicinity of some proposed SEZs, and more diffuse opposition to the idea of SEZs in the wider public discussion. It has prompted debates concerning how SEZs will be integrated into local and regional political jurisdictions and regulatory regimes. There is also considerable interest in the question of how the as yet largely untested structures for governing SEZs will function in practice.
This project will consist of two main research themes. The first concerns the establishment of SEZs, particularly the nature and composition of movements that arise in opposition to specific SEZs, and the responses of state agencies and other elements of the wider political system such as political parties, elected politicians, and non-governmental organizations. The second centers upon how SEZs will be governed, their links to wider processes of urban restructuring, and the uncertainties concerning the relationship between SEZs and the many overlapping jurisdictions within which they are situated.
Research Theme No. 1: The Establishment of SEZs
Contention has been most intense in cases where local people - allied, in a number of cases, with external social-action groups and political actors - have organized to resist the forcible (or, in some cases, highly coerced) acquisition of land by project developers acting in concert with state officials. But many other forms of resistance - from a much wider array of actors - can be found throughout India. Some criticism is as much to do with the efficiency of the SEZ as a growth-promoting mechanism as with the equity of SEZ implementation.
Resistance to SEZ proposals has already shown itself capable of assuming highly varied forms. Enormous contrasts can be found from one project site to the next, as well as between states. A crucial point of variation is how generous, comprehensive, and credible government compensation pledges are for 'project-affected people'. The politics of resettlement and rehabilitation is central to a study of how the SEZ policy is unfolding, and the trajectory of its future development.
It is therefore of considerable urgency to understand why, in some cases, protest movements have been relatively successful in obtaining concessions from state governments - up to and, in some cases, including withdrawal of project approval - while other movements have failed to secure credible promises of a more humane approach to industrialization. By documenting the trajectories of anti-SEZ movements of various types over the next two years, and analyzing state-movement dynamics as these evolve over the next two years, this project will map the shape and impact of an important branch of policy-oriented social activism in contemporary India.
Research Theme No. 2: The Governance of SEZs
The governance issues raised by SEZs have both regulatory and political dimensions. For instance, there is concern about how SEZs, sometimes covering very large areas (up to 50 km2 for multi-product SEZs), will fit into existing land-use plans and infrastructure supply networks. Urban regions in particular are concerned, since most projects are concentrated in and around cities. However, issues of urban governance aspects have received little attention in the SEZ Act 2005, or in fact in analysis of its implementation.
Indeed, a large percentage of SEZs are located in India's most populous metropolitan regions, with major consequences for urbanization rates and patterns, as well as for urban infrastructure and employment, in terms of both quantity and type. To the extent that SEZ projects are promoted by private investors, there is concern about the manner in which they will be integrated into local spaces, with regard to networked infrastructure and services (electricity, water, drainage, roads, mass transit). The SEZ policy is based on the idea that private promoters will develop world-class infrastructure within the designated boundaries of SEZs, including (in the case of large multi-product SEZs) housing facilities and social infrastructure such as schools, hospitals, commercial centers, and other public amenities. It is thus unclear to what extent these enclaves will connect with existing infrastructure, and who will bear the cost of ensuring connectivity with existing networks established to provide communications, electricity, and other services. Moreover, there is growing apprehensiveness among planners about what will transpire just beyond the boundary walls of the SEZs, notably informal settlements.
The legislation is also vague about the degree of control, if any, local and regional governments and their administrative agencies will be able to exercise with regard to SEZs, including compliance with local planning laws, environmental rules and other forms of regulation. In effect, SEZs have their own management-cum-governance structures, which will include both representatives from the SEZ developers and government-appointed officials, most notably a 'Development Commissioner', to whom such executive powers may be delegated as are deemed necessary by the central and state governments. There is concern that residents living in SEZs will not have locally elected representatives, as is already the case in Gujarat, where SEZs have been given the status of Industrial Townships, and are hence not required (under the provisions of India's 74th Amendment, which deals with urban government) to institute an elected municipal council.
Policy Formulation/Revision and Institutional Innovation
Each of the two research themes outlined above raises a distinct set of issues. They are linked, however, in at least two ways.
First, they are linked sequentially. The two research themes can be thought of as phases in the process of implementing India's SEZ policy: the establishment of SEZs is followed by their operation, which involves not merely a set of business decisions, but also an array of questions relating to how these zones will be governed. As phases in an unfolding sequence, the establishment and governance of SEZs are processes that affect one another as well. That is, private-sector developers and other actors involved in the establishment of SEZs are, in part, influenced by what they expect the governance arrangements to entail. Conversely, the internal structures through which SEZs are governed, and their relations with various levels and types of public authority - municipal governments, planning authorities, state-government departments, regulatory agencies, etc. - may well be shaped by the specific circumstances that attended the establishment of a particular SEZ.
The two research themes are also linked analytically, in the sense that both provide a window onto the processes by which (a) policies are formulated and revised; and (b) institutions are created and/or transformed. In other words, it is apparent that both the establishment and the governance of SEZs entails much more than implementing a clearly laid out policy design. A good deal of improvisation is, and will continue to be, involved. Therefore, the research team will be examining not merely the trajectory of individual SEZ cases, but also the process by which - in response to practical exigencies, as these arise - relevant policies are revised, and institutions created.
For instance, as private-sector developers and state agencies go about establishing SEZs, they have been confronted with the need to reassess the suitability of existing laws and regulations relating to land acquisition and to the resettlement and rehabilitation of project-affected persons. The establishment process is also creating the need for new institutions - which may or may not be met in any given case - to monitor the implementation of programs through which new forms of compensation, such as the provision of jobs for dislocated families, are granted. As regards the governance of SEZs, state-level policy frameworks and institutional mechanisms may also be subjected to pressures for adaptation - for instance, with respect to the mandate and jurisdiction of metropolitan planning authorities and state electricity regulators.
The core of the project will be empirical studies of SEZ implementation in a range of India's states. Project researchers working on cases of SEZ establishment and SEZ governance will examine the drivers of policy revision and institutional innovation. The synthesis of the research findings will attempt to identify the factors that account for variation across states in this regard.
THEORETICAL GROUNDING AND CONTRIBUTION
The research process will engage with a broad spectrum of existing scholarship. There are at least two reasons for directly addressing the established literature: to borrow concepts that make analysis more precise or thorough, and to make a contribution to the literature by registering new positions into existing debate. This conceptual approach to this project is shaped by both motivations.
Each of the two main research themes around which the project is structured will draw on and enrich a number of specialized literatures.
In researching the process by which SEZs are established, the project will engage with three main bodies of existing scholarship. The first is the political economy of policy change. This provides insights about the role of ideas, interests, and institutions in shaping the choices made by key stakeholders. It also has the potential to illuminate the constraints on effective political action.
The second is the literature - much of it official documentation, as well as NGO commentary thereon - on policy domains that affect, and are affected by, the process through which many SEZs are established: land and land-use policy; environmental assessment and clearances; resettlement and rehabilitation of project-affected peoples. This literature provides useful definitions, but also a necessary historical depth, as in some cases the history of the state's default on prior promises (to earlier generations of 'project affected people') can prove a formidable barrier to generating constructive discussion of alternative models for social compromise in the pursuit of industrialization.
The third field is the literature on social movements. Insights from this literature will prove useful in analyzing the protest formations that arise in response to specific SEZs, as well as state reactions to these movements. How to analyze the rhetorical positions of movement leaders is a question to which this literature speaks as well. The portion of the literature that focuses on resource mobilization theory and repertoires of contention poses a series of questions that can be employed in the analysis of the case-study material.
The project's second research theme - on the governance of SEZs - also engages with three distinct yet overlapping literatures. The first relates to recent initiatives to decentralize powers and resources to local authorities, and to empower local communities to participate in decision-making. Since the passage of the 73rd and 74th Amendments to India's constitution in the early 1990s, India has been at the forefront of debates concerning how best to make decentralized governance both more effective and more participatory. Because the precise place of SEZs in the scheme of local governance is underspecified, there has been widespread concern about the mechanisms through which decision-makers will be held accountable.
The second literature of relevance to the governance of SEZs has to do with the process of metropolitan restructuring, which refers to changing economic profiles (characterized by more service-oriented activities) and the privatization of public services. One strand of this literature examines the increasing fragmentation of urban space, linked to the trend of growing spatial and functional specialization (e.g., strictly residential colonies, economic enclaves, institutional areas) and consequent restrictions on access. SEZs are seen to exacerbate this tendency, while also potentially shaping urban futures, by imposing new visions of the city that emphasize 'world-class' infrastructure and lifestyle models.
The third literature concerns state re-scaling, which examines the continuous sizing up and sizing down of the jurisdictional boundaries of economic activities depending on the regulatory functions involved. Analyzing SEZs through concepts developed in this literature will prove useful in situating India's strategic response to global market forces, and identifying localized trade-offs. It will be pursued through international comparisons that mobilize the knowledge, experience, and academic contacts of the team's members.
The project co-ordinators can be contacted at: