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Chapter-VII: Socio-Legal Impact of Special Economic Zone (SEZ) in Punjab: A Case Study of Mohali

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CHAPTER-VII

SOCIO-LEGAL IMPACT OF SPECIAL ECONOMIC ZONE (SEZ) IN

PUNJAB: A CASE STUDY OF MOHALI

7. Introduction

Punjab was the first Indian State to use agricultural technology to engineer a “GreenRevolution”, recording the highest growth rate in food production. Today, with its

rich agricultural resources and favourable climate, the state continues to be one of the

largest producers of food grains and cash crops in the country. Punjab contributes

68% to the annual food production of India. Punjab’s large agriculture base gives it a

competitive advantage in industries such as food processing and textiles. Punjab with

5.03 million hectares area and population of 24.3 million has a number of advantages

of doing business. Agriculture has been the main stay of Punjab’s economy. Althoughit accounts for 1.5% of total land area of the Country, yet it accounts for 54% of the

marketable surplus of wheat and 38% of the marketable surplus of rice in India.

The growth of the SEZ in Punjab against the backdrop of resurgent growth in the

Indian economy, the improved performance of the industrial sector specially SEZ

across Punjab, and the expanding opportunities offered by the greater integration of

the Indian economy with the rest of the world. Punjab today became the sixth state in

the country to put in place its own SEZ Act, with the passing of Punjab SEZs Bill

2009 by the state assembly here.1 Now the grant of concessions will get a legal status

with the enactment of Punjab SEZ Act and the development of SEZ projects will be

accelerated. The SEZ status is one of them like as the Chandigarh Technology Park

(CTP) which is providing the biggest attraction for Companies planning to invest in

the region SEZ means the area notified by the Govt. of India under the SEZ Act, 2005

or rules framed there under and developed by Chandigarh. Punjab’s industrialperformance up to the end of the 1980s was much better than that of the country as a

whole a number of existing industries in Punjab are dominated by the small scale

sector.2 The industrial scenario in Punjab has suffered from the lack of modernization

of the small scale units, which contribute about half of the total industrial production

in the state.3

1 SEZ Rules, Ministry of Commerce, New Delhi, February 10, 2007.2 Jayanta Roy, “Promote modern SEZs in India” Financial Express, February 2005.3 Economic Survey 2007-08. (Oxford University Press).


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Table-7.1: Geographical and Ecological Area of Punjab

S.No Particulars

Amloh

Sub-divisionBassi

Pathana

Sub-division

Khamano

Sub-division

Fatehgarh

Sahib Sub-

division

Total

1 No. of villages 103 100 76 175 454

2 Area (Hect.)

(a)Geographical

Area26120 20657 19593 48409 114779

(b)Net Cultivated

Area23167 18124 17885 42852 102028

(c) Banjar 171 6 10 54 241

(d) Forest 423 620 475 504 2022

Punjab is located in northwestern India, and has an area of 50,362 km2. It extends

from the latitudes 29.30° north to 32.32° north and longitudes 73.55° east to 77.50°

east. It is bounded on the west by Pakistan, on the north by Jammu and Kashmir, on

the northeast by Himachal Pradesh and on the south by Haryana and Rajasthan most

of the Punjab lies in a fertile plain, alluvial plain with many rivers and an extensive

irrigation canal system.4 The proposed strategy would help rejuvenate these units. The

strategy emphasizes the importance of a cluster approach within the framework of

public private partnership to rejuvenate the existing small scale units in light

engineering, leather, sports goods, etc.5 It recommends developing infrastructure,

providing common facilities, promoting technology up-gradation, and building skills

through properly conceiving and designing industrial clusters so as to help the small

4 Punjabgovt.nic.in. http://punjabgovt.nic.in/punjabataglance/SomeFacts.htm. Retrieved 2010-07-18.5 Economic Survey of Punjab, 2007-08. Economic Advisor to Government of Punjab


269

scale units in these industries to become globally competitive. For the small scale

units in the auto components sector, it recommends attracting at least one large

automotive unit in Punjab which can help the modernization of these units through

ancillarization and vendor development.

Punjab Ranks high in the Country in the Following Areas:-

Infrastructure

Power

Road Network

Telecom Density

Attractive Consumer Market

Agriculture Production

Table-7.2: Parameter Punjab

Area 50362 square Kilometer

Divisions 04

Districts 20

Towns 141

Cities 14

Inhabited Villages 12278

Higher/Senior Secondary Schools 4043

Middle Schools 2481

Primary Schools 13291

Source: Statistical Abstracts of Punjab, 2006

Land differs from other elements of production, labor and capital in not being

susceptible to infinite increase. Its extent is limited and the extent of more productive

kinds of it more limited still. It is also evident that the quantity of produce capable of


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being raised on any given piece of land is not indefinite. These limited quantities of

land, and limited productiveness of it, are the real limits to the increase of production.

- John Stuart Mill

Mill wrote these words 160 year ago and they ring true for India today. With the

pressure of billion-plus mouths to feed, and return on agricultural inputs declining, it

would seen prudent to protect the area under agriculture, if not bring more area under

cultivation. However, what we are witnessing is the reverse. Faced with competing

demands for land from the non-agriculture sector and rapid industrialization,6 large

chunks of prime agriculture land are being diverted for non- agricultural purposes.7

This has been serious implications for food security. The issue of land acquisition for

setting up SEZ has pivoted loss of agricultural land to a Punjab issue.8

7.1 SEZ and Economic Development: Liberalization, Privatization and

Globalization

India was one of the first in Asian country to recognize the effectiveness of the EPZ

model in promoting exports as far back as in 1965 at Kandla in Gujarat. SEZ has

supplanted the EPZ projects with a view to overcome the shortcomings and attracting

foreign investments in Liberalization, Privatization and Globalization (LPG) regime.9

India’s large market size and abundant availability of quality manpower makes it

amenably suitable for attracting investments in both manufacturing and service sector.

The products should be in line with the strategic strengths and weaknesses of the

location. The SEZ Units in India were set up to promote industrialization and

economic growth through sustainable development. The SEZ policy states tax rebates,

fiscal incentives and lands at subsidized rates. This is evident from the objectives of

SEZs which inter alia include drainage and sewage system, in-house customs

clearance facilities generation of additional economic activity, promotion of exports

of goods and services, promotion of investment from domestic and foreign sources,

creation of employment, development of infrastructure facilities, simplified

6 Basu. Pranab, “Political Economy of Land Grab” Economic & Political Weekly, Vol 42, No 14.(2007)7Alesina,A & D. Rodrik, “Distributive Policies & Economic growth”,Quarterly Journal ofEconomics,Vol.109.1994

8 Goswami Bhaskar. “Social,Political,Economic and Environmental Concerns of Special EconomicZones in India: As International experience” .2009

9 Gope & Arindam Ghosh “Special Economic Zone in India: A Tool to Economic Development” themanagement accountant, May,P357.(2009)


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procedures for development, operation, and maintenance of the SEZs and for setting

up units and conducting business, single window clearance and simplified compliance

procedures and documentations with stress on self certification.

The major advantages of SEZ in economic development are 10-year tax holiday;

exemption from duties, excise/VAT on all imports for project development. The SEZ

implies no foreign ownership restrictions & no restrictions on repatriation in

developing zone infrastructure. There is also freedom to develop township in to the

SEZ besides attracting 10% FDI allowed through the automatic route for all

manufacturing activities,10 self-certification in the labor and speedy approvals. This

should go along with houses in both domestic and international air terminals to

facilitate transit, to and from major domestic and international destinations. Thus a

vibrant industrial city with abundant supply of skilled manpower, covering the entire

spectrum of industrial and business expertise remains well connected with network of

public transport, local railways and cabs. In order to ensure pollution free

environment, easy access to airport and local Railway Station should be developed

and may include provision for services such as water, electricity, security, restaurants

and recreational facilities within the zone on purely commercial basis.11 For attracting

multinationals and FDI the Indian companies are unwilling to commit huge

investments in manufacturing sector. The multinational companies by creating world

class infrastructure, operating environment and efficiency benchmarks provide

impetus to power and oil, transportation, services, electronics and telecommunication,

electrical equipment and computer software. The FDI allowed in the SEZs in India is

for the purpose of easy availability of funds and for the fast development of the

units.12 Share of FDI in total investment was increased from 11% to 22% from the

year 1997 to 2008.13

As a natural sequel, the SEZs became an engine for economic growth and

employment generation. The experience in last 62 years with the Industrial areas and

Industrial clusters has been that large slums sprang up in the neighborhood of these

10 Joseph, T J and V Nagi Reddy. “FDI Spillover and Export Performance of Indian ManufacturingFirms after Liberalisation” Economic & Political Weekly, Vol 44, pp 97-105 (2009)

11 http://business.mapsofindia.com/sez/advantages-units-india.html12 Acharya,S “Eassy on Macroeconomic Policy and Growth in India” Oxford University Press,

India(2006).13 Kuntluru, Sudershan, Venkata Reddy Muppani & Mohammad Akbar Ali Khan, “Foreign Direct

Investment and Export Performance of Pharmaceutical Firms in India: An Empirical Approach”International Journal of Economics & Finance, Vol 4, pp 216-26 (2012).


272

areas. Besides, the additional population creates pressure on the municipal system.14

The employment provided by central government SEZS and State Government and

Private SEZs established prior to SEZ Act, 2005 is 1, 93,474 and 44,768 persons

respectively. The zonal-wise employment generated by seven Government SEZs are

19,002, 85,103, 33,000, 29,195, 11,374, 11,600 and 4,200 persons from Kandla SEZ,

SEEPZ SEZ, Noida SEZ, MEPZ SEZ, Cochin SEZ, Falta SEZ and Vishakhapatnam

SEZ respectively. They have a projected direct employment for about 1,500 persons.

Apache SEZ being set up in Andhra Pradesh will employ 30,000 persons to

manufacture 10, 00,000 pairs of shoes every month. Current employment in Apache

SEZ is 5,325 persons. Brandix Apparels, a Sri Lankan FDI project would provide

employment to 60,000 workers over a period of 3 years. Even in the services sector,

12.5 million sq meters space is expected in the IT / ITES.15 It is, therefore, expected

that establishment of SEZs would lead to fast growth of labor intensive manufacturing

and services in the country.16

7.2. Punjab’s Development Since 1980 to SEZ Era

The Indian state of Punjab is located on the north western part of the country and has

always acted as the defending arm of India.17 Punjab is known for ushering the ‘Green

Revolution’ in the nation.18 Occupying only 1.54 % of the country’s total

geographical area, it contributes 60.9% to the National Food Pool for 33.1% of Wheat

and 27.8% of Rice. Almost 98% of the gross cropped area in Punjab is irrigated, as

compared to only 41.2% for the entire India, 37 Mega Agri Projects have been

approved with an overall investment of Rs. 30,000 million. Enterprise symbolizes the

spirit of Punjabi people. With the post green revolution, Punjab has earned the

distinction of being the “Granary of India.”

14G. Naresh. Reddy, “Special Economic Zones –Engines for Growth” The Management Accountant,May,348-35(2009)

15Id 17 at.P34916Id 18 at.P35017 Pandit. M. L. Industrial Development in the Punjab & Haryana. 1985.18 Geography of Punjab (1998) written by Darshan Singh Manku.


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Table-7.3: Punjab at Glance

Parameter Punjab

Area Kilometer 50362 square

Divisions 04

Districts 20

Towns 141

Cities 14

Inhabited Villages 12278

Population 243.59 Lakh

%age of rural population 67.08%

Density of Population 484 persons/sq. Km

Rajya Sabha Seats 7

Vidhan Sabha 117

Lok Sabha Seats 13

Source: Statistical Abstracts of Punjab, 2006

The SSI and L&M distribution of industry indicates that the main industrial centers in

Punjab are Ludhiana, Patiala and Amritsar. Ludhiana is known for the production of

hosiery. District Ludhiana leads Punjab in industrialization.


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Table-7.4: District-wise Distribution of Industry in Punjab as on 31 March 2000

DistrictUnits(No) Employment(No) Investment(Lakh)

Production(Lakh)

SSI L&M Total SSI L&M Total SSI L&M Total SSI L&M Total

Amritsar 27221 58 27279 113748 19007 132755 49999 84631 134630 208335 95865 304200

Ludhiana42232 166 42398 265871 72252 338123 95664 302577 398241 556094 597737 1153831

Patiala 12579 109 12688 45041 32272 77313 39300 266377 305677 126840 363461 490301

Total 820232 333 82365 424660 123531 548191 184963 653585 838558 891270 1057063 1948332

Source: Director of Industries. Note :( SSI) Small Scale Industry,(L&M) Large & Medium Scale Industry


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Figure-7.1: Industrialization in Punjab

District Ludhiana leads Punjab in industrialization. More than 29% of the industrial

output of Punjab comes from Ludhiana,19 which has the highest number large and

medium units. While Amritsar and Jalandhar were traditionally more advanced, but

now they are lagging behind Ludhiana in terms of rapid industrial growth.20

On the economic front, Punjab is ranked 4th in terms of per capita income as

compared to first, till a few years ago.21 Following the trend observed in Indian

economy, contribution of primary sector to the economy of Punjab has also come

down to 31.24% of Gross State Domestic Product and this is further declining.22

Punjab’s industrial performance up to the end of the 1980’s was much better than that

of the country as a whole. Ironically, Punjab’s long draw slowdown in industrial

growth began during the 1990s when the government of India launched a process of

wide ranging economic reforms opening the Indian economy to imports as well as

domestic competition which provided larger scope to the private sector to generate

19 Statistical Abstract India Central Statistical Organization Government of India. 200020 Industrial Development in the Punjab & Haryana (1985) by Dr. M. L. Pandit.

21Appu,P.S, “Land Reforms in India: A Survey of land Policy”, Legislation and Implementation,N.Delhi.1997

22 Aggarwal, Aradhna. “Performance Of Export Processing Zones: A Comparative Analysis OfIndia, Sri Lanka And Bangladesh”, Working Paper No.155, Indian Council for Research onInternational Economic Relations. New Delhi: ICRIER, March. (2005).

0

500000

1000000

1500000

2000000

2500000

0 2 4 6 8 10 12 14

Amritsar

Ludhiana

Patiala

Total


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growth in the economy.23 To some extent, the major declaration in agricultural growth

had a dampening effect on the industrial sector in Punjab in the 1990s. A major

challenge in the development of industry in Punjab is the very high price of land,

which is much more expensive than in other parts of the India,24 even after making

allowance for the fact that land is much more fertile in Punjab. A number of existing

industries in Punjab are dominated by the small sector. The industrial scenario in

Punjab has suffered from the lack of modernization of the small scale units, which

contribute about half of the total industrial production in the state. The new engine of

growth is now the SEZ. The main difference between an EPZ and SEZ is that the

former is just an industrial enclave while the SEZ is an integrated township with fully

developed infrastructure. They were created as privileged zones with the facilities of

liberal tax and labor laws. They were to attract the FDI and almost the entire indirect

employment in Punjab comes from one zone, Quark City SEZ, in Mohali, which

proposes to create half a million indirect jobs and directly employ 55,000 IT/ITES

workers on a 13.75 hectare plot.25 If we could replicate Quark’s proposed

employment intensity, across the approximately 20,000 hectares of SEZs that have so

far been notified, we would have created more than 700 million proposed jobs.26

7.2.1 Punjab as Economic Export

Total exports of industrial goods from Punjab were valued at US$ 3.8 billion in 2010-

11 as compared to US$ 3.3 billion in 2009-10.

23 Singh. Pritam, Federalism, Nationalism and Development: India and the Punjab Economy.London; (2008).

24 Radhika Chopra. “Militant and Migrant: The Politics and Social History of Punjab” (2011).25 Statistical abstracts of Punjab, 2007 published by Government of Punjab.26 The Quark City SEZ is promoted by Quark Inc., which has a large share of the publishing software

market. A quark is a physical particle that is visible only fleetingly. They form one of the two basicconstituents of matter and various species of quarks combine in specific ways to form protons andneutrons.


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Figure-7.2: Export of Punjab

Source: Statistical Abstract Punjab 2011

In 2010-11, the principal export items were hosiery and readymade garments, yarns

and textiles, engineering goods, rice and auto parts. Ludhiana, Jalandhar and

Gurdaspur accounted for around 97.0 per cent of the total exports of industrial goods

from Punjab in 2010-11.

7.3 Evolution of Special Economic Zones in Punjab

New Industrial Policy, 2009 of Punjab has been implemented, under which special

package of concessions has been provided for information technology & knowledge

based industries, agro based industries and food processing industries. In order to

promote the IT/Knowledge industry in the state, new schemes relating to

reimbursement of stamp duty to IT units, providing capital subsidies and other

incentives to IT units for quality certifications etc [Appendix-7.1]. have been included

in the Annual Plan 2011-12 with an outlay of Rs. 0.19 billion. A fund of Rs. 0.20

billion has been provided in 2011-12 for creation and up gradation of industrial

infrastructure. In order to boost the development of Special Economic Zones, ‘Punjab

Special Economic Zones Act, 2009’ has been implemented. Under this act, purchase

of land for SEZ and first sale of plots have been exempted from all state duties and

taxes including stamp duty and registration fee. Govt. of India has sanctioned 17 SEZ


278

proposals for Punjab, out of which two SEZs have been notified and are being set up,

one by M/S Quark City at Mohali for IT Industry and another by M/S Ranbaxy at

Mohali for pharmaceutical industry. Government of India has been approached for

removing the condition of minimum requirement of land by a developer for setting up

of a Special Economic Zone.

Punjab is sixth state in the country to enact SEZ Act after Haryana, Gujarat,

Maharashtra, Madhya Pradesh and West Bengal.

Table-7.5: Development Projects: SEZs

Source: www.sezindia.nic.in

7.4 Salient Features of the Punjab SEZ Act, 2009 Are As

(1) Exemption from Stamp Duty, Registration Fee and Social Security Cess on

purchase of land & on first transfer or lease of immovable property within SEZ

(2) Allocation and transfer of land within SEZ by way of sale or lease

(3) Permission for generation of electricity in or outside SEZ for consumption of

units

(4) No electricity duty on generation, transmission, distribution and consumption of

electricity within SEZ

(5) All SEZ units will be given a public utility status

(6) Single - tier Project Approval Committee for evaluation of the projects


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Figure-7.3: Mechanicality of Business Opportunity

7.4.1 Single Window

To help entrepreneurs obtain speedy clearances for setting up industry in Punjab, the

Government has set up a special cell called Udyog Sahayak (industry facilitator). All

knowledge driven industries such as IT, electronics and biotechnology have a separate

“single window” service mechanism under Punjab Information and Communication

Technology Corporation Ltd.

7.4.2 Special Agencies to Facilitate Industrialization

Some of the special agencies that help in facilitating industrialization in the state

include:

(1) Punjab State Industrial Development Corporation

(2) Punjab Small Industries & Export Corporation

(3) Punjab Financial Corporation

Single WindowClearance

Special Agencies toFacilitate

Industrilization

BusinessOpportunities


280

7.4.3 Investment Opportunities

Punjab adjudged as the best place for doing business in India as per World Bank

Study, 2009

Figure-7.4: A View of Investment Opportunity

7.4.4 Exemption From Inspection under Various Labor Laws

IT units will be exempted from inspections under the following Acts and the Rules

framed there under, barring inspections arising out of specific complaints. IT units are

permitted to file self-certificates, in the prescribed formats.

(i) The Factories Act, 1948

(ii) The Employment Exchange (Notification of Vacancies Act), 1961

(iii) The Punjab Shops and Commercial Establishment, 1958

InvestmentOpportunities

Clean&proactive

political &business

environment Special Incentives& facilitation for

Mega Projects

Time boundstatutory &

non-statutoryclearances

Single pointproject

clearancemechanism

implementedComplete hasslefree dealing with

Government

IndustrialFacilitationAct enacted

Exemption fromzoning

regulations

Presence ofeffective

judicial system


281

(iv) The Contract Labor (Regulation & Abolition) Act, 1970

(v) The Payment of Wages Act, 1936

(vi) The Minimum Wages Act, 1948

(vii) The Employment Exchanges Act, 1959

All IT units have general permission for three shift operations with women allowed to

work in the night shift for IT Industry, provided adequate measures have been taken

to ensure safety of the women employees.

Figure-7.5: Graphical Representation of SEZ


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Table-7.6: SEZs With Formal Approvals

Name/developer Area Primary industry

QuarkCityIndia Private

Limited (notified)

Mohali IT

Ranbaxy Laboratories Limited

(notified)

Mohali Pharmaceuticals

Vividha Infrastructure Private

Limited

Patiala Engineering

Mridul Infrastructure Private

Limited

Patiala Textiles

Lark Projects Private Limited Mohali Electronic hardware

Sukhmani Towers Private

Limited

Nenetpur and Jawaharpur IT/IteS

Sukhm Infrastructure Private

Limited

Mohali IT

ATS Estates (P) Limited Patiala IT/ITeS

Shipra Estate Limited Mohali IT/ITeS

IshanDevelopers &

Infrastructure Pvt.Ltd

Amritsar Textiles


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Table-7.7: SEZs With In-principle Approvals

Name/developer Area Primary industry

DLF Universal Limited Ludhiana Multi-product

DLF Universal Limited Amritsar Free Trade & Warehousing Zone(FTWZ)

DLF Universal Limited Amritsar Textiles

DLF Universal Limited Amritsar Engineering

DLF Universal Limited Amritsar Food processing

Rockman Projects Limited Ludhiana Textiles

MalhotraLand Developers &Colonizers Private Limited

Ludhiana Auto components

Source: www.sezindia.nic.inSEZs

Table-7.8: SEZs Notified in Punjab: An Employment

Name Type Area

(Hectares)

Investment

Rs. Crores

Employment

Quarick, India

Pvt. Ltd. ,Mohali

IT 20 677 3000

Ranbaxy Lab Ltd Pharmaceuticals 32 0 3000

Source: Punjab Industrial Review, Isher Judge Ahluwalia,Saumitra Chaudhuri and Samrat Sidhu


284

Figure-7.6: Area’s of SEZ in Punjab

A pharmacy specific SEZ in Punjab was notified in the name of Ranbaxy as the

developer in April, 2007. An area of 32 hectares was acquired by Ranbaxy from the

Punjab small Industries and Export Corporation. Ranbaxy has already set up a

medium size tablet manufacturing units in SEZ with the capacity of 3000 million

tablets per annum with an investment of Rs 0.86 billion.27 There are plans to set up

additional capacities catering to the generic pharmaceutical market primarily in the

US, EU and other developed economies. A IT specific SEZ in Mohali was notified in

the name of Quark city India Pvt. Ltd. as the developer in same year.28 This SEZ

covers an area of 20 hectares and is expected to attract investment of Rs 7.77 billion

and create direct employment for 3000 persons.

7.5 Proliferation of Study Area

Sahibzada Ajit Singh Nagar (S.A.S. Nagar) District has been carved out of areas

falling in Ropar and Patiala District as 18th District of Punjab on 14th April 2007.

Because of its contiguous with the union territory of Chandigarh, the district has been

formed to achieve growth of development as this area is emerging as major I.T. hub

of Northern India. The district includes Mohali, Kharar and Dera Bassi Teshils. It is

27 Government of India, Annual Report 2005-06, (Ministry of Commerce) New Delhi.28 Economic Survey of Punjab, 2007-08 by Economic Advisor to Government of Punjab.

0

1000

2000

3000

4000

5000

6000

7000

Area(Hectares)

Employment

Ranbaxy LabLtdPharmaceuticalsQuarick, IndiaPvt. Ltd.,Mohali IT

Name Type


285

located in the north eastern part of Punjab and forms the part of Patiala division The

District includes 414 villages. The important townships in the district are Kharar,

Kurali, Mohali, Zirakpur & Dera Bassi. Kharar tehsil is the largest administrative unit

of the new district with 154 villages followed by Dera Bassi Tehsil with 44 villages.

S.A.S. Nagar has emerged as an industrial focal point and has been designated as the

district head quarter. It has become a satellite town of Chandigarh and has registered a

fast rate of growth.

Table-7.9: Root Map of Survey

District SAS Nagar

Tehsil

SAS Nagar TehsilDerabassi Tehsil Kharar Tehsil

Sub Tehsil

Majri Sub TehsilBanur Sub Tehsil

Blocks

(1)Kharar (2) Majri (3) Dera

(1) Block= Kharar

Villages

Mullanpur(Garibdas) Jhanjeri Sahaura Manauli


286

Figure-7.7: Rood Map of Survey of Villages of SAS Nagar


287

7.6 Socio-Legal Issues in the Study Region

S.A.S Nagar is one of the most developed areas as well as the main urban centre of

the Greater Mohali Region. Based on the inherent qualities as well as the stage of

development in the local planning area, S.A.S Nagar being the largest and most

urbanized town, has assumed the status as the central business and financial district of

Greater Mohali Region.

The S.A.S Nagar LPA is strategically situated immediately to the south west of the

capital for the state of Punjab and Haryana in Chandigarh, which is also an

administrative centre for both the states of Punjab and Haryana.

Due to the large amount of committed projects in this area which are all provided with

substantial industrial component, there is likely to be a high degree of competition

between projects and differentiated market positioning. SAS Nagar will need to have

a unique brand identity and offer investors something ‘different’ in order to achieve

the vision it has set for itself.

7.7 Statistical Findings of Awareness of SEZ by Villager

This section based on the four village’s survey namely Mullanpur (Garibdas),

Jhanjeri, Sahaura and Manauli.

The Mullanpur is a big village. The researcher has thus selected 10% of the total

households of that area. The local peoples are well aware from the SEZ position.

Table-7.10: Awareness of the local people relating to SEZ

Village Mullanpur: Awareness of SEZ (%)Option of Questions Q1 Q2

Strongly Disagree 10 7.5Disagree 12.5 12.5Neither agree nor Disagree 18.75 7.25

Agree 43.75 57.25Strongly agree 15 17.5

Note: Q1= Do you know about a Special Economic Zone (SEZs)? Q2= Do you know the location of a

SEZ in your area?


288

Figure: 7.8.: Awareness of SEZ in Village of Mullanpur (%)

The above graph indicate the 43% local people know what is Special Economic Zone

and 56% people know as in which part of area SEZ is located. Thus it can be inferred

that people are aware for the SEZ in this area. These two prominent question relating

to the awareness of the villager directly shows that the support for SEZ is much

higher in this area in comparison to other areas not included in research.

Table-7.11: Awareness Relating of Socio-economic Aspects

Option of Questions Q3 Q4 Q5

Strongly Disagree 35 15 17.5

Disagree 15 27.25 12.5Neither agree nor Disagree 7.25 7.25 38.75

Agree 41.25 33.75 17.5

Strongly agree 2.5 18.75 13.75

Note: Q3= Farmers land can be acquired for Public, commercial and private companies.Q4= SEZ has

benefited and raised socio-economic status.Q5= SEZs are different from the rest of the economic laws

of the nation.

10 12.518.75

43.75

157.5

12.5

6.25

56.25

17.5

0

10

20

30

40

50

60

StronglyDisagree

Disagree Neitheragree norDisagree

Agree Stronglyagree

Awarenss of SEZ in Mullanpur

Series1

Series2


289

Figure-7.9: Socio-economic Standard

The graph of Mullanpur village shows that 35% farmers strongly disagree that land

are acquired for private purpose, only 2.5% local people strongly agree that

government acquired farmers land for private or companies purpose or in another

words that agricultural land is covered into non agricultural purposes. The 38% local

farmers are active on the role of Panchayat in issues relating to SEZ.

Table-7.12: Sustainable Development


Strongly Disagree 11.25 15 11.25

Disagree 15 10 7.5

Neither agree nor Disagree 10 7.5 5

Agree 38.75 37.5 28.75Strongly agree 25 30 47.5

Note: Q23= Wildlife is declining in your area due to industrialization.Q24= SEZ units are exempted

from Environment Impact Analysis (EIA) and have adverse consequences on local environment.Q25=

SEZ has increased traffic in the local area and resulted in air emissions.

Strongly Disagree

Disagree

Neither agree nor Disagree

Agree

Strongly agree


289










Disagree 15 10 7.5






0 10 20 30 40

Strongly Disagree

Disagree


Agree

Strongly agree

35

15

6.25

41.25

2.5

15

26.25

6.25

33.75

18.75

17.5

12.5

38.75

17.5

13.75


289










Disagree 15 10 7.5






50

41.25

38.75 Q5

Q4

Q3


290

Figure-7.10: Environmental Awareness in Mullanpur

The above graph highlighted the sustainability of the environment in the study area of

Mullanpur village. The farmers of that area are aware of the concept of sustainable

development. 38% of the respondent is having the positive view of the SEZ being the

main cause of declining of the wildlife in area. The 37.5% local people of the village

agree that SEZ units are exempted from Environment Impact Analysis (EIA) and have

adverse consequences on local environment. In case of Air pollution 47% people’s

response strongly agree.

Thus, sustainability can be defined as the capacity to maintain a certain process or

state indefinitely. According to Brundtland Commission convened by the United

Nations in 1983 the “Sustainable Development” is defined as balancing the

fulfillment of human needs with the protection of the natural environment. The human

needs should be met not only in the present, but in the indefinite future as well.

Infinite economic growth is impossible on a finite planet, and that Earth’s limits also

defines the limits of all material-based activities. An unsustainable situation occurs

when natural capital (the sum total of nature's resources) is used up faster than it can

be replenished.

0

5

10

15

20

25

30

35

40

45

50

StronglyDisagree

Disagree

11.251515

11.25


290

















be replenished.


Agree Stronglyagree

15

10

38.75

25

107.5

37.5

30

7.55

28.75

47.5


290

















be replenished.

Stronglyagree

47.5

Q23

Q24

Q25


291

7.8 Sustainable Development

Sustainable development implies that the needs of the present generation are to be met

without compromising the ability of future generations to meet their own needs. It

postulate approaches like lying off the income of nature without eroding the capital,

giving back to the earth what is taken from it, living without the carrying capacity of

the environment and realization that biosphere is both for us and our descendants.

Thus, the concept of sustainable development is a novel one inter-generational link

and perspectives.

Table-7.13: Environmental Sustainability

Option of Questions Q17 Q25

Strongly Disagree 23.75 11.25

Disagree 13.75 7.5

Neither agree nor Disagree 7.5 5

Agree 23.75 28.75

Strongly agree 31.25 47.5

Note:Q17= The water quality and aquatic life of your area have affected due to the establishment of

SEZ. Q25= SEZ has increased traffic in the local area and resulted in air emissions.


292

Figur-7.11: Environmental Sustainability and Biodiversity

The above graph of Mullanpur highlighted that 31% of the resident of village strongly

agree that the water quality and aquatic life of the area have got affected due to the

establishment of SEZ.

The 47.5% resident of villager are strongly agreed that SEZ has increased traffic in

the local area and resulted in air emissions.

7.9 Ecological Challenges

The sustainable management of natural resources like water and land has not received

adequate attention. Due to unsustainable practices followed by the SEZs many

problems have cropped up.

7.9.1 Water Scarcity

India fears scarcity of water in coming years in spite of abundant rains, rivers and

lakes. Many people die in India because of drinking polluted water from resources

like rivers or ground water. The conventional buildings lack water treatment and

water management systems. Entire grey water from bath, wash basin and kitchen

(residential waste water) is not recycled and it is pumped down to the sewers. The

sewerage water is rarely treated and recycled depending on the residential location

and affordability of technology. The untreated water finds its way to the rivers or

ground causing water pollution which influences the health of many people. India is

lacking proper water management system and as an outcome of it the groundwater is

disappearing and river bodies are turning into makeshift sewers.

23.75

13.75

7.5

23.75

31.25

11.257.5

5

28.75

47.5

05

101520253035404550

StronglyDisagree

Disagree Neither agreenor Disagree

Agree Strongly agree

Q17

Q25


293

Figure-7.12: Biological Diversity is Under Threat

Source: The Hindu Newspaper , Available

at:http://www.hindu.com/pp/2006/11/19/stories/2006111900130600.htm


293





293





294

Table-7.14: Overall Responses of the Respondents

Option of Questions Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15

Strongly Disagree 10 7.5 35 15 11.25 17.5 13.75 42.5 11.25 28.75 15 11.25 13.75 30 11.25

Disagree 12.5 12.5 15 27.25 8.75 12.5 18.75 15 15 38.75 11.25 10 12.5 27.5 15

Neither agree nor

Disagree18.75 7.25 7.25 7.25 7.5 38.75 25 7.25 27.5 2.5 30 37.5 15 13.75 3.75

Agree 43.75 57.25 41.25 33.75 28.75 17.5 27.5 23.75 30 15 20 22.5 25 17.25 28.75

Strongly agree 15 17.5 2.5 18.75 43.75 13.75 15 12.5 17.25 15 23.75 18.75 33.75 12.5 41.25


295

Figure-7.13: Overall Responses of Selected Respondents

The above graph shows that Mullanpur villagers are very active in the SEZ activities.

There are some persons whose income has also got enhanced by the establishment of

SEZ. The questioners 50% questions are represented in the above graph.

7.9.2 Economic Growth

Village’s economy has an increasing growth that has been curved from the past

several years. This, in turn, has reduced poverty to some extent but still its complete

eradication is one of the major challenges for local government.

Table-7.15: Table of Awareness of SEZ in the Village of Jhanjeri (%)

Option of Questions Q1 Q2 Q3 Q4Strongly Disagree 25.71 18.57 12.86 31.43

Disagree 12.86 11.43 10 24.29

Neither agree nor Disagree 14.29 17.14 11.43 11.43

Agree 30 31.43 44.29 12.86Strongly agree 17.14 21.43 21.43 20

Note:Q1= Do you know about a Special Economic Zone (SEZs)? Q2= Do you know the location of a

SEZ in your area?Q3= Farmers land can be acquired for Public, commercial and private

companies.Q4= SEZ has benefited and raised socio-economic status.

0 10 20 30 40 50 60

Q1Q2Q3Q4Q5Q6Q7Q8Q9

Q10Q11Q12Q13Q14Q15

Strongly agree

Agree


Disagree

Strongly Disagree


296

The above table indicates % awareness of SEZ in the locality. The 30% people of the

village know what is Special Economic Zone.

Figure-7.14: SEZ Awareness in Jhanjeri

It indicates that in Village of Jhanjeri 30% locality knows about a Special Economic

Zone, 31% knows where SEZ located in the local part. 44% knows that SEZ is

beneficial to them.

Employment

Poverty can be eradicated by creating job opportunities in the local region. Job

opportunities in SEZs and other related sources would provide a source of living to

the local population and make them capable enough to take care of their daily needs.

In local areas, sustainable constructions would create a vast demand for new jobs in

the field of business such as building project engineers, on-site construction workers,

contractors. Thus ample of job opportunities could be created starting from the

processing of raw materials to creation of final solutions.

7.10 Environmental Degradation

If there is magic on this planet, it is contained in water. - LORAN EISELY

Air and water, the most precious gifts of the nature, are very essential not only to the

mankind but flora and fauna also.29 All living creatures on the mother earth have a

29 "Indian States : Punjab :: Flora And Fauna". India Travel Information. http://www.india-travel-information.com/india-information/Indian-States/Punjab/333-Flora-And-Fauna.html. Retrieved2010-07-18.

25.71

12.86 14.29

30

17.1418.57

11.4317.14

31.43

21.43

12.8610 11.43

44.29

21.43

31.43

24.29

11.43 12.86

20

0.005.00

10.0015.0020.0025.0030.0035.0040.0045.0050.00

StronglyDisagree



Q1

Q2

Q3

Q4


297

right to environment in order to survive them. According to section 2 (a) of the

Environmental Protection Act, 1986 'Environment' includes (i) water, air and land (ii)

the inter relationship which exists among and between, (a) water, air and land, and

(b) human beings, other living creatures, plants, microorganisms and property. There

is an inseparable relationship between man and environment. It is, therefore, our

bounden duty to protect our environment for the peaceful survival of the mankind as

well as flora and fauna.

The right to water can be read as being implied in the recognition of the right to a

clean environment. In Subhash Kumar v. State of Bihar30, the Supreme Court

recognized that the right to life ‘includes the right of enjoyment of pollution free

water and air for full enjoyment of life’. In the Sardar Sarovar case, the Supreme

Court went further and directly derived the right to water from Article 21. It stated

that ‘water is the basic need for the survival of the human beings and is part of right

of life and human rights as enshrined in Article 21 of the Constitution of India’. While

the recognition of a fundamental right to water by the Courts is unequivocal, its

implementation through policies and acts is not as advanced.

Table-7.16: Environmental Awareness (%)

Option of Questions Q23 Q24 Q25 Q26

Strongly Disagree 12.86 21.43 12.86 8.57

Disagree 10 15.71 11.43 12.86

Neither agree nor Disagree 5.71 8.571 2.86 31.43

Agree 37.14 31.43 41.43 31.43

Strongly agree 34.29 22.86 31.43 15.71

Note:Q23= Wildlife is declining in your area due to industrialization. Q24= SEZ units are exempted

from Environment Impact Analysis (EIA) and have adverse consequences on local environment. Q25=

SEZ has increased traffic in the local area and resulted in air emissions. Q26= SEZ is generating

harmful gases by which surrounding villages are being suffered with fatal diseases.

30 1991 AIR 420, 1991 SCR (1) 5


298

Figure-7.15: Environmental Awareness in Area

The graph depicts environmental awareness of the local peoples.

7.10.1 Environmental Impact

In villages the constructions have been ongoing without giving much attention on

environmental biodiversity issues which has resulted in pressure on natural resources

apart from having influence on the human health and well-being. Unplanned and

unsustainable urban development has lead to severe environmental pressures. The

forests and ground water resources have been severely depleted to give way to new

constructions in the urban areas.

12.8610

5.71

37.1434.29

21.43

15.71

8.571

31.43

22.86

12.8611.43

2.86

41.43

31.43

8.57

12.86

31.43 31.43

15.71

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

StronglyDisagree



Q23

Q24

Q25

Q26


299

Table-7.17: SEZ Awareness in the Village of Sahaura (%)


Strongly Disagree 12.86 11.43 12.86

Disagree 25.71 18.57 10

Neither agree nor Disagree 17.14 14.29 11.43

Agree 30 34.29 44.29

Strongly agree 14.29 21.43 21.43

Figure-7.16: Environmental Impact in Area

Q1= Do you know about a Special Economic Zone (SEZs)?. Q2= Do you know the location of a SEZ

in your area? Q3= Farmers land can be acquired for Public, commercial and private companies.

The above graph indicates that 30% local people know what are Special Economic

Zone and 34.29% people known in which part of area SEZ is located. In case of

Farmer land acquired for SEZ 44.29% people are agree.

12.86

25.71

17.14

30

14.29

11.43

18.57

14.29

34.29

21.4312.86

10 11.43

44.29

21.43

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

50.00

StronglyDisagree



Q1

Q2

Q3


300

Table-7.18: Socio-legal Awareness of Sahaura Village

Option of Questions Q5 Q6

Strongly Disagree 12.86 32.86

Disagree 10 11.43

Neither agree nor Disagree 5.71 10

Agree 31.43 15.71

Strongly agree 40 30

Figure-7.17: Labour Awareness in the Locality

Note: Q5= SEZs are different from the rest of the economic laws of the nation.Q6= Do you know

what the role of Panchayat in setting a SEZ?

The above graph indicates the socio-legal awareness of the local people of the area

where 40% people strongly agree that SEZs are different from the rest of the

economic laws of the nation, and 30% strongly agree on that there is no role of

Panchayat in setting of a SEZ. The people of this area also strongly disagree on the

point of what is the role of Panchayat in setting a SEZ?

12.8610

5.71

31.43

40

32.86

11.43 10

15.71

30

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

StronglyDisagree



Q5

Q6


301

7.10.2 Socio-economic Scenario of Manauli

Table-7.19: Awareness of SEZ


Strongly Disagree 12 68.42 38

Disagree 10 31.58 26


Agree 36 73.68 12

Strongly agree 24 57.89 18

Figure-7.18: Awareness of SEZ in Manauli

Q1== Do you know about a Special Economic Zone (SEZs)? Q2= Do you know the location of a

SEZ in your area? Q3= Farmers land can be acquired for Public, commercial and private

companies.

12 10

18

36

24

68.42

31.58 31.58

73.6857.89

38

26

612

18

0

10

20

30

40

50

60

70

80

StronglyDisagree



Manauli: Awareness of SEZ (%)

Q1

Q2

Q3


302

The above graph indicate the 36% local people know what is Special Economic Zone

and 73.68% people know as in which part of area SEZ is located. Farmers land can

be acquired for Public, commercial and private companies 18% respondents are agree.

Thus it can be inferred that people are aware for the SEZ in this area. These two

prominent question relating to the awareness of the villager directly shows that the

support for SEZ is much higher in this area in comparison to other areas not included

in research.

The Table below shows the family still suffers from malnutrition and other health

problem in the village.

Table-7.20: Family’s Health (%)


Strongly Disagree 12 18 38

Disagree 26 16 24

Neither agree nor Disagree 14 26 14

Agree 30 24 10

Strongly agree 18 16 14

Note:Q18 Children in your family still suffer from malnutrition.19 The women in your house and

neighborhood are still suffering from anemia by dint of SEZ.Q20= There are large number of persons

suffering from chronic disease in village adjacent SEZ.


303

Figure-7.19: Health and Malnutrition in Area

The above graph indicates the problem relating to the health of the area. In this

village30% people agree that family still suffer from malnutrition. The 16% strongly

agree response in case of women in respondent house and neighborhood is still

suffering from anemia. There are 14% of persons suffering from chronic disease in

village adjacent SEZ.

Table-7.21: Human Security in Area


Strongly Disagree 12 24 14

Disagree 8 18 16Neither agree nor Disagree 6 14 24

Agree 44 24 18

Strongly agree 30 20 28

Note:Q27= SEZs have been exempted from labour laws and made labour socially insure. Q28=

SEZ has led to women empowerment.Q29= SEZ has proved boon in eradication of poverty and

creation of security among peoples.

12

26

14

30

18

1816

2624

16

38

24

14

10

14

0

5

10

15

20

25

30

35

40

StronglyDisagree


Agree Stronglyagree

Health (%)

Q18

Q19

Q20


304

Figure-7.20: Human Security of Area

The above graph shows that44% respondents are agree that SEZs have been exempted

from labour laws and made labour socially insure, 24% agree that SEZ has led to

women empowerment. In case of SEZ has proved boon in eradication of poverty and

creation of security among peoples only 18% respondent agree.

12

8

6

44

30

24

18

14

24

20

14

16

24

18

28

0

5

10

15

20

25

30

35

40

45

50

StronglyDisagree



Human Security (%)

Q27

Q28

Q29


305

Figure-7.21: Comprehensive Socio‐legal Graphical Look Out of survey Area-I


306

Figure-7.22: Awareness of SEZ in the Study Area of Four villages-II


307

7.11 Judicial Responses

In Devinder Singh v. State of Punjab31 where the State initiated Part II proceedings to

acquire land for a tractor manufacturing company, the Supreme Court after noticing

the amended Section 3(f) correctly held as follows: When a request is made by any

wing of the State or a government company for acquisition of land for a public

purpose, different procedures are adopted. Where, however, an application is fi led for

acquisition of land at the instance of a ‘company’, the procedures to be adopted

therefore are laid down in Part VII of the Act. Though the Court is shown the decision

in Pratibha Nema’s case32 the Court declined to follow that ratio and held

as under: Expropriatory legislation, as is well known, must be strictly construed.

When the properties of a citizen is being compulsorily acquired by a State in exercise

of its power of Eminent Domain, the essential ingredients thereof, namely, existence

of a public purpose and payment of compensation are principal requisites thereof. In

the case of acquisition of land for a private company, existence of a public purpose

being not requisite criteria, other statutory requirements call for strict compliance,

being imperative in character.

The Supreme Court then relied on the decision of the SC in General Government

Servants Cooperative Housing Society Ltd, Agra v. Sh Wahabuddin33 and concluded

that Rule 4 was mandatory and Companies were required to negotiate with farmers

and avoid acquisition of agricultural land. In that case, the Supreme Court held: The

above consideration shows that Rule 4 is mandatory; its compliance is no idle

formality; unless the directions enjoined by Rule 4 are complied with, the

modification under Section 6 will be invalid. A consideration of Rule 4 also shows

that its compliance precedes the notification under Section 4 as well as compliance of

Section 6 of the Act. This decision however could easily be distinguished on facts as

payment by the government for acquisition came after the Section 4 notification. It

can therefore be argued that this was a case where the entire contribution for

acquisition was to come from a company and that the subsequent payment by

government was to cover up for what was essentially acquisition for and paid for by a

31 (AIR 2008 SC 261).32 (2003 10 SCC 626).33 (1981 2 SCC 353).


308

company. In State of Punjab v. Raja Ram,34land was acquired for the construction of

godowns for the Food Corporation of India. The acquisition was set aside in the

following terms: The Corporation being a ‘company’ compliance with the provision

of Part VII of the L A Act had to be made in order to lawfully acquire any land for its

purpose. It is not denied that such compliance is completely lacking in the present

case.

7.12 Conclusion

The research work has shown an unsatisfactory performance of SEZ process in study

area. A lot of the residents of the areas nearby, especially those of the selected

villages the SEZ are not in support of their establishment. Even the legal setup too is

seen not performing rule in Punjab in the issue of making a balance between the

society and corporate.

Punjab needs a clear and transparent law for facilitating land acquisition for industrial

development. In the absence of such a policy, Punjab will miss out the opportunities

which are being exploited by many states in providing a major push to their industrial

derive. The SEZ policy was first introduced in the nation in April 2000, as a part of

the EXIM policy of India.35 Considering the need to enhance foreign investment and

promote exports from the country and realizing the need that level playing field must

be made available to the domestic enterprises and manufacturers to be competitive

globally. On the basis of economic theory and history it can be thus concluded that

absorption of agricultural labor is necessary for sustained economic development of

India. SEZs constitute a medium for such sustenance. However, the SEZ policy in

India has suffered from permission being granted for far too many sub-optimally sized

SEZs or for others to serve as appendages to mega cities already suffering from

overcrowding, infrastructure and a size which far exceeds the optimum. The most

important bottleneck in all this is the agricultural produce marketing committees act

which limits the ability of the private sector to buy and sell agricultural crops directly

from farmers or to set-up new markets. A number of other states have already

amended this Act, in line with the model Act suggested by the government of India. It

is recommended that the government of Punjab speedily amend the APMC Act and

34 (1981 2 SCC 66).35 Financial Express. “SEZ's to attract FDI worth $700 mn”, Financial Express. Mumbai: Indian

Express Group, December 19.2006


309

do so in a manner consistent with best practices in other states. This will enable

market forces to generate economic activity and employment at a rapid pace, thus

ensuring that economic prosperity is shared between the rural and the urban areas of

Punjab. The government of Punjab should set up a high power committee to promote

and facilitate the development of SEZs, learning from the successes and drawbacks in

the other states and creating a model for facilitating land acquisition, which is

transparent and more workable. A SEZ for agri-export should consider in places like

Govindwal, near Beas in the Amritsar district. The SEZ could focus on high value

organic agri produce growth under controlled climate conditions. Thus, SEZs may be

encouraged but within manageable parameters; approve after thorough scrutiny of the

sustainability of such propositions with a preference for developing them in the waste

land, barren regions and semi-fertile land and thereby not affecting the cultivable

areas; compensate and rehabilitate the land owners and related peasants with well

balanced standard compensation package such as employment opportunities; provide

well developed infrastructure facilities within the premises of SEZs with forward and

backward linkages.

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