The Commerce Ministers have often said, in response to queries, that labour laws were applicable in SEZs. Labour disputes, if any, are supposed to be taken care of by the Commissioners, who are appointed by the Government to govern the SEZs. Media remains unaware and so does the Parliament, about the type of labour disputes that take place in SEZs and how they were being resolved.

Equally significant is the fact that even officers of the Labour Departments, both Central and States, cannot enter the SEZs. They are required to seek State Government’s permission if they think of visiting any SEZ. But they cannot intervene in any labour dispute. None has cared to visit any SEZ so far.

Any survey of the Labour conditions in SEZs would easily reveal that labour unions do not exist in any of the SEZs. It is common knowledge that without the support of the collective (union) individual worker cannot defend himself against excesses of the employers. It is therefore obvious that SEZs’ workers will continue to suffer as long as they do not take courage and organise themselves as did the Bangladesh SEZs’ workers.

According to the Economic Survey, out of the total employment of 6,44,073 persons in SEZs, an incremental employment of 5,09,369 persons was granted after February 2006 when the SEZ Act came into force. At least double that number obtains indirect employment outside the SEZs as a result of operations of SEZ units. This is in addition to the employment created by developers for infrastructure activities.

Survey says that India recognised early the effectiveness of the Export Processing Zones (EPZ) model in promoting exports, with Asia’s first EPZ set up in Kandla in 1965. It was meant to overcome the multiplicity of controls and clearances; absence of world-class infrastructure; and an unstable fiscal regime to attract larger foreign investment in India. In this context, the Special Economic Zones (SEZs) Policy was announced in April 2000.

In India, SEZs functioned from November 2000 to February 9, 2006 under the provisions of the Foreign Trade Policy whereas the fiscal incentives were made effective through the provisions of relevant statutes. Meanwhile, the SEZ Act 2005, supported by SEZ Rules, came into effect on February 10, 2006, providing for drastic simplification of procedures and for single window clearance on matters relating to Central as well as State Governments. The SEZ Rules provide for different minimum land requirements for different classes of SEZs.

In addition to 7 (seven) Central Government and 12 State/private sector SEZs set up prior to enactment of the SEZ Act 2005, formal approval has been accorded to 588 proposals. Out of these, 374 SEZs have been notified. Today, SEZs are stated to be playing a significant role in India’s exports. A total of 130 SEZs are stated to be already exporting. Out of these, 75 are Information Technology (IT)/IT-enabled Services (ITeS), 16 are multi-product and 39 are other sector specific SEZs. The total number of units in these SEZs are 3,139. The physical exports from SEZs increased by 121 per cent to Rs 2,20,711 crores in 2009-10.

The Economic Survey has sought to make out one more point in support of emergence of SEZs on India’s export horizon: when the whole world including India was reeling under the impact of global recession, growth in exports from SEZs was 121 per cent in 2009-10 compared to a paltry 0.6 per cent growth in total export from India. At the same time, the share of SEZs in India’s total exports has increased consistently from 4.7 per cent in 2003-04 to 26.1 per cent in 2009-10 and 29.7 per cent in the first three quarters of 2010-11.

The total investment in SEZs till December 2010 has been approximately Rs 1,95,348 crores including Rs 1,91,313 crroes in the newly notified zones. It needs to be mentioned that in SEZs 100 per cent FDI is allowed through automatic route. SEZs being set up under the SEZ Act 2005 are primarily private investment driven. The Government role is that of a facilitator by fast-tracking the approvals rather than providing any direct monetary support.

While the regime is happily acting in SEZs as enabler and facilitator of the private corporate sector including FDI, it is obviously set against the public sector. In this backdrop, the role and capacity of PSUs is bound to decline, opening the way for UPA-II policy-makers to call for their disinvestment. That is what seems to have been the fate of public sector in SEZs too. The Survey says that the new SEZs have come up mainly in the private sector with no funding from the Government. “Now the time has possibly come,” it says, “to see whether some of the established SEZs which are state-owned could also be privatized.” Disinvestment in these SEZs could not only add to the kitty of the Government and release more money for social-sector development but could also make these SEZs more efficient.

That the enabler Government provides billions worth of concession to SEZs employers and builders has been fully computed and publicized by competent observers. Here, what needs to be added that the facilitator Government deliberately maintains silence when SEZs employers are flagrantly violating every bit of labour laws and allowing SEZs employers make huge profits at the cost of workers.

Cursory queries with some of the central trade union organisations also showed the poor state of labour affairs in SEZs: HMS said they had registered one union in Kandla long ago but it could not function due to local conditions. A similar reply was from the AITUC. CITU leader M.K. Pandhe said, he had written umpteen letters to the Government about poor state of industrial relations in SEZs; he had even suggested that Government allow the Central and State Labour Commissioners to visit SEZs. Government has given no worthwhile response. The CITU has even formally lodged a complaint with the ILO about the poor state of industrial relations in Indian SEZs.

Obviously, the SEZ labour has yet to go a long way. (IPA Service)