The Telegraph
Since 1st March, 1999
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- SEZs and the national commission for farmers

It was the ancient Fifties. A venerable academic used to preside over the School of Economics and Sociology of the University of Bombay at its magnificent Churchgate campus. Once the annual budget of the Union government was presented on the last working day of February, the professor would, year after year, make the same observation on its contents: the budget was like the curate’s egg, good in some parts, not so good in others. Given the predictability of his annual comment, the sobriquet, Professor Curate’s Egg, stuck to him.

An occasion for remembering that old story has been provided by the recommendations of the national commission for farmers. The commission has come down heavily on the concept of special economic zones. It has strongly disapproved of the eagerness in official quarters to compel farmers to surrender arable land for enabling the establishment of SEZs. There is no mincing of words on its part: “Prime farm land must be conserved for agriculture and not be diverted for non-agricultural purposes and for programmes like the Special Economic Zone.”

While reaching its conclusion, the commission must have taken into account recent trends in farm output in the country, including the fact that per capita availability of foodgrains today is less than what it was at the dawn of independence. The issue of employment and livelihood has not escaped its attention either. Despite the hoopla over accelerated growth in industry and services in the past decade, employment has been stagnating in these sectors. In the circumstances, the take-over of agricultural land — the source of livelihood for nearly two-thirds of the nation — for non-farming purposes is not only morally wrong, but it also hardly makes any sense in terms of sheer economic criteria either.

Nonetheless, the pressure persists. The globalization lobby, sold on the luscious dream of SEZs, have their agents at all levels of administration; they have also succeeded in penetrating the sanctum of politicians. The firm position taken on SEZs by the national commission for farmers is therefore encouraging. Projects of such nature, the commission is of the view, should only be assigned “wasteland and/or land afflicted by salinity and other abiotic stresses which reduce the biological potential of land for the purpose of farming”.

What, however, follows in the commission’s report is a gross anti-climax, reminding one of the analogy of the curate’s egg. Distressed at the phenomenon of several state governments jumping on the wagon of SEZs, the commission wants the Union government to take the matter in its hands: the Centre must assume control over issues concerning agriculture all over the country, including policies with regard to land use. But land and agriculture are, under the Constitution, State subjects, occurring as Entries 14 and 18 in the State List in its Seventh Schedule. Not to be deterred, the commission has urged a full-fledged constitutional amendment, whereby agriculture would be transferred from the State List to the Concurrent List. Once that happens, the Centre would have the final say in all matters pertaining to the farm sector; anarchy in land use would automatically cease.

How should one assess the worthwhileness of this astounding recommendation' The Union government is, obviously in the commission’s judgment, more full of wisdom than state governments generally are and ministers at the Centre are more solicitous of the welfare of farmers than nondescript ministers populating state administrations. The assumptions are way off the mark. Why cavil at facts' The proposal for SEZs originated in the first place in New Delhi, conceivably on advice rendered by interested parties, foreign and domestic. It is the Centre, which has been dinning into the ear of state governments the fable of the economic miracle SEZs have effected in China while carefully failing to mention the scale factor that makes the difference: in conditions between the two countries.

In India, permits for SEZs are distributed like confetti, even for areas as small as 10 hectares; in China, the usual minimum size for an SEZ is at least a hundred times as large. And of course nobody chooses to mention the political surveillance the Communist Party of China exercises over the entire operations of the SEZs there.

The state governments have merely fallen into the trap set for them by the Centre in this matter. The principal decision-makers in the arena of economic policy in the Central administration are the office of the prime minister and the ministries of finance and commerce. While the ministry of finance might feel somewhat querulous about the possible revenue loss resulting from the proliferation of SEZs, all three entities are in fact keenly interested to see them sprout; their existence supposedly boosts the rate of growth of gross domestic product.

A further factor calls for equal attention. The Fiscal Responsibility and Budget Management Act has killed whatever scope for financial manoeuvrability the state government had earlier possessed. And yet, they have to pay heed to the clamour for development emanating from the grassroots. Desperately looking for funds to start new development projects, state governments fall prey to the illusory charm of SEZs. A constitutional amendment transferring surveillance of agriculture from the states to the Centre would not therefore save agriculture from the perils of SEZs. The remedy prescribed is about as dangerous as the disease.

It is possible to go a little beyond. The Union government has actually no locus standi to impose on the states any national policy for farming or farmers. If a state government, for example, wants to enforce a drastic policy of land reforms and passes legislation to take away from affluent peasants land in excess of, say, twenty acres, the Centre would have no business to thwart it in the name of a national farming policy; the Constitution does not give the Centre that right, and the recommendation of the commission to amend the Constitution for implementing such a policy contradicts the federal ethos which inspired the nation’s struggle for freedom.

Why blame, though, the commission alone' Basic awareness of states’ rights and provisions of the Constitution is often lacking even amongst those who preside over the state governments. Consider a recent instance. A state chief minister, call him A, is importunating an industrial tycoon to set up a major steel project in his state. His state does not, however, produce crude iron, while a neighbouring state has it in plenty. The chief minister of this neighbouring state, call him B, cannot be blamed if he would consider as his first priority the conservation of the raw material so as to start a steel project in his own state; Entry 18 in the State List allows him this prerogative.

Chief Minister A is peeved no end, and wants the prime minister to order B to part with his crude iron. Nobody is seemingly around to tell A that, as long as the Constitution remains unchanged, the prime minister cannot do anything to help him out; even Entry 54 in the Union List, which permits the Centre to intrude into the jurisdiction of states in the interest of mineral development, is unlikely to be of any avail towards forcing a state to surrender its minerals to serve the interest of another state in case its own development is impeded thereby. Rather than committing the folly of calling for Central intervention, A should sit together with B and, on the basis of some quid pro quo, try to reach a mutually satisfactory arrangement.

Those ruling at the Centre would perhaps love to scrap wholesale the existing Constitution and replace it by a unitary framework of administration. That would only further multiply the country’s already complex problems. Expert-ridden commissions and state chief ministers should first brush up their knowledge of the facts of life before they venture to dispense advice and make wholesale recommendations on crucial national issues.

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