SEZs - Grabbing away the lands

The retail sector in India is now in deep trouble and it will further deepen in the forthcoming five years. The development of ‘shopping mall culture’ in the country is the cause for this threat. In addition, the establishment of special economic zone is a parallel cause for the downfall threat of retail sector.
With the help of foreign investment, multinational companies and big industrial houses has started entering into these malls by investing huge capitals. Foreign companies are targeting 110 crore population of India and investing huge money , keeping in view of upcoming business profits and is trying to establish mega malls across the country.
The promise of these companies is that they provide all goods, from needle to sword, dust to silver, gold and diamond jewelers under one roof. Due to heavy investment, they are buying goods in bulk directly from factories or manufactures on cash with discounts. As a result, the trade of other Indian authorized dealers, retail and wholesale traders etc will see an end.
The giant industrial houses in major include Reliance, Tata, Adanis, Spencer, Mahindra, Hindustan Unilever, Unitech, Wall mart, E-Mart etc. Reliance is now trying to purchase crops directly from farmers, thus becoming a threat to the existence of intermediaries. Fresh vegetables are collected from states including Tamil Nadu, Kerala, and Karnataka at cheaper rates and are stored in large warehouses in mass volume. The vegetables reach the market only when demand and price rises in the nation.
The increased trend of ‘mega mall culture’ is overviewed with threat by retail sectors. The existence of common traders is on question. Though, the central government is welcoming it, some individual states as Uttar Pradesh has banned the establishment of multinational shopping malls. If the future trade falls off within the hands of these giant mega malls, India in no time, will become a puppet in the hands of foreign monopoly.
The approval of government to bring particular areas under Special Economic Zone (SEZ) is equally disturbing the existence of retail and wholesale traders. Here these areas are supposed to follow different economic laws that are more liberal than India’s typical economic laws. By promoting some areas as SEZ, government wishes to increase its foreign investment in India. But Indian government is itself turning into a scapegoat before foreigners.
Chennai in Tamil Nadu, Cochin in Kerala, and Noida in Uttar Pradesh are the major areas that are being converted into SEZ. It is said that SEZ gives an opportunity for the domestic enterprises and manufactures to compete globally.
P. Nazruddin, president of Merchant Association, Calicut stated that if SEZ is introduced in India widely, the scenario will take a terrific face. Commonly, in a state, government has introduced VAT (Value Added Tax). But for SEZ’s, VAT is not applicable. In Indian economy, if a profit is earned of two lacks is earned by Indian corporate sectors and other industries, 25 percent of that profit should be paid as income tax. But SEZ is avoided from income tax.
Even the electricity charges are reduced to 1/8th in SEZ. When a foreign entrepreneur maintains SEZ, it is not compulsory for him to hire Indian labor. Instead, he can hire labor for cheap rates from outside India, which brings out unemployment in India. Just 18 workers in a SEZ will replace the work of 400 workers in Indian industries. The situation stands similar to giving room for a stranger in our house, who later becomes our house-head.
The irony is that, our Indian government is strongly welcoming this attempt. The foreign money that may flow in through SEZ is their aim. The national economists should be concerned about the economic instabilities that may burst out in the forthcoming years. Economy may boom and development may be beyond imagination. The other world giants will come to invest. We may be able to economically stabilize and technologically revolutionalise. But, a people of high tradition and culture may be vanished and Indian agricultural lands may turn into a fiction.