MUMBAI: India’s tourist state of Goa has dropped plans to build industrial enclaves, officials said on Wednesday, after protests that reflect wider opposition to similar projects across the country.
India’s rush to build Special Economic Zones, Chinese-style tax-free industry zones to encourage exports, has generated trouble. In some cases individual projects have been shelved after violence.
But Goa is the first to abandon all plans to build SEZs following strong protests from political and environmental groups who say a proliferation of industry could ruin the state’s fragile ecology and hurt tourism, the mainstay of its economy.
“It has been decided to cancel all the projects now for various reasons,” Goa Chief Minister Digambar Kamat said.
But the state seemed set for a confrontation with the federal government which said it would not withdraw permission given to three SEZs because they were now “legal entities”.
“There is no provision under the SEZ act where a state government can withdraw permission,” G.K. Pillai, federal commerce secretary, said.
Drug maker Cipla, which had planned to invest about $127 million in one of the Goa SEZs, said it had had no communication from the state and was going ahead with its project.
“We had started construction after acquiring land from the SEZ developer, although work in the last couple of months had been disrupted,” said Amar Lulla, managing director of Cipla.
“We are hopeful that work will begin again soon.”
SOCIAL TENSION: Across the country, forced purchases of farmland provoked violent protests and cancellation of some SEZ projects, including one in the eastern state of West Bengal. More than 30 people were killed in clashes over a proposed chemicals industry zone there.In just a year, India’s federal government has approved nearly 400 SEZs, and received proposals from state governments for 304 more.
But many farmers, unhappy at the idea of being forced to sell their land, would like to do away with the whole idea.
Goa, a palm-fringed beach resort by the Arabian Sea, had plans to build 15 industrial enclaves that would have mostly housed information technology and outsourcing firms.
But land is hard to come by in the small, former Portuguese colony and new industry and a heavy influx of outsiders would strain its limited resources, groups opposed to SEZs say.
“The strain on our resources is not commensurate with the benefits and also there is the general social tension about SEZs,” J.P. Singh, Goa’s most senior bureaucrat, said.
The confrontation threatened to hit Goa’s peak-season tourism industry, with protesting urging tourists to leave before the New Year or risk violence. Armed troopers were called in to protect the visitors.—Reuters
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