Land Acquisition for Special Economic Zones in India
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LAND ACQUISITION FOR SPECIAL ECONOMIC ZONES IN INDIA ________________________________________________________________________ A Thesis Submitted to the Temple University Graduate Board ________________________________________________________________________ In Partial Fulfillment Of the Requirements for the Degree MASTER OF ARTS ________________________________________________________________________ By Chelsea Fish January, 2011 Thesis Approvals: Sanjoy Chakravorty, Thesis Advisor, Department of Geography and Urban Studies Benjamin Kohl, Committee Member, Department of Geography and Urban Studies ABSTRACT This study is an exploration of land acquisition for Special Economic Zones (SEZs) in India. Land acquisition has become one of the most well known problems confronting the SEZ policy and other policies that encourage private investment in infrastructure. Land acquisition for SEZs has caused widespread popular mobilizations and resistance, which have in turn led to cost overruns, delays, and project failures. This study examines India’s land acquisition framework, particularly the evolution of the Land Acquisition Act 1894, in order to understand the factors contributing to acquisition problems when the state uses its power of eminent domain, as well as when private developers attempt to acquire land through consensual market transactions. It uses two SEZs spanning over 14,000 hectares of land near Mumbai—Navi Mumbai SEZ and Mumbai SEZ—as cases through which to examine the land acquisition process. i ACKNOWLEDGMENTS I wholeheartedly thank all of the members of the department of Geography and Urban Studies for their support during my studies at Temple University. However, I owe particular thanks to Professors Benjamin Kohl and Sanjoy Chakravorty. Ben, of course, is the reason I ended up at Temple University, and he continued to provide a constant source of support while I was here. Even before he was my thesis advisor, Sanjoy helped me to hone many of the ideas that eventually became part of this paper. I have benefitted tremendously from his encouragement to explore a variety of literature; his willingness to offer his frank opinion; and his patience. Finally, I would like to thank Patrick for enduring the writing process with me with good grace, unwavering enthusiasm, and relentless encouragement. ii TABLE OF CONTENTS ABSTRACT ......................................................................................................................... i ACKNOWLEDGMENTS .................................................................................................. ii LIST OF TABLES ...............................................................................................................v LIST OF FIGURES ........................................................................................................... vi CHAPTER 1. INTRODUCTION: THE LAND PROBLEM IN INDIA ................................................1 Purpose and Methodology .......................................................................................6 Significance..................................................................................................8 Organization .................................................................................................9 2. THE POWER TO TAKE ...............................................................................................11 Justifications for Eminent Domain ........................................................................15 Compensation and Valuation .................................................................................21 Public-Private Takings: Politics and Economic Development ..............................29 Public Purpose: A Problem of Means and Ends? ..................................................34 3. PROPERTY AND PUBLIC PURPOSE IN INDIA ......................................................39 Property Under the Indian Constitution .................................................................40 The First, Fourth, and Seventeenth Amendments ......................................41 The Twenty Fourth and Twenty Fifth Amendments .................................44 The Forty Fourth Amendment and Beyond ...............................................46 The Land Acquisition Act ......................................................................................47 Compensation Under the Land Acquisition Act ........................................54 The Land Market in India ......................................................................................55 Reforming Land Acquisition and Compensation ..................................................58 4. SPECIAL ECONOMIC ZONES ...................................................................................65 Periods in India’s Economic History .....................................................................65 SEZs Worldwide ....................................................................................................69 The Chinese Experience ............................................................................72 SEZs in India..........................................................................................................76 Salient Features of the SEZ Act 2005 and Rules 2006 ..........................................80 Infrastructure and Land ..............................................................................83 Setting Up an SEZ .....................................................................................84 Current Status of Indian SEZs ...............................................................................92 Denotification ............................................................................................95 iii 5. THE CASES OF MUMBAI AND NAVI MUMBAI SEZS .........................................97 MiSEZ: The Integrated Zones ...............................................................................99 Economic and Social Geography of Northern Raigad District ............................102 Raigad, Navi Mumbai, and the Mumbai Metropolitan Region ...............107 Locational Advantages.............................................................................109 Navi Mumbai SEZ ...............................................................................................116 Mumbai SEZ ........................................................................................................117 Summary of Objections ...........................................................................122 Compensation ..........................................................................................126 Alternative Forms of Resistance ..............................................................130 Power, Information, and Corruption in Land Acquisition ...................................131 6. CONCLUSIONS: LAW, LAND, AND POWER........................................................137 BIBLIOGRAPHY ............................................................................................................144 APPENDICES A. SEZs IN DISTRICTS NEAR MUMBAI ....................................................................155 iv LIST OF TABLES Table Page 1.1 India’s Political Landscape: Land and the “Million Mutinies” ............................. 2 3.1 Acquisition and Compensation Policies: 1894-2010 ........................................... 61 4.1 Differences Between EPZ Policies and the SEZ Act in India ............................. 78 4.2 SEZ Incentives and Exceptions ........................................................................... 82 4.3 Minimum Contiguous Area Requirements by SEZ Type .................................... 85 4.4 Procedure for SEZ Notification and Demarcation ............................................... 89 4.5 Procedure for Obtaining Grant of Approval for Authorized Operations in SEZ ............................................................................................................................ 90 4.6 Procedure for Setting up Units in an SEZ ............................................................ 91 4.7 Distribution of SEZs by State .............................................................................. 93 5.1 SEZ Statistics for Districts Near Mumbai ......................................................... 111 v LIST OF FIGURES Figure Page 1.1 The Threat of Another Singur or Nandigram ........................................................ 4 4.1 SEZ Locations in India ........................................................................................ 92 5.1 MiSEZ: The Integrated Zones ........................................................................... 102 5.2 NMSEZ: Four Nodes ......................................................................................... 112 5.3 Detail: Droganiri Node ...................................................................................... 114 5.4 Detail: Ulwe West (waterfront) and Ulwe East (airport) Nodes ........................ 115 5.5 Detail: Kalamboli Node ..................................................................................... 115 vi Before the law stands a doorkeeper. To this doorkeeper there comes a man from the country and prays for admittance to the Law. But the doorkeeper says that he cannot grant admittance at the moment… These are difficulties the man from the country has not expected; the Law, he thinks, should surely be accessible at all times and to everyone, but as he now takes a closer look at