Monday, September 11, 2006

SEZ's may turn out to be a farce after all!!

The supposedly 'WISE' have prevailed in the democracy run within the we are to possibly have more and more SEZ with no real cap on the number allowed. We are aping China on the path to success as much as possible. Shouldn’t that make us happy...I am not so sure and so are a lot of people like me including our bumbling PC :)....So SEZs are supposed to bring in its path rapid growth and at the very least a spurt in real estate. The other good thing is that SEZs are supposed to cut the bureaucratic red tape which has been one of the sore spots in India's rise towards development. They are supposed to cut the babu's fiefdom into shreds and help the business function with as little intervention from the government as possible.. Incidentally as cited in these articles (by Swaminathan Aiyer and Gurcharan Das) the most important sore points of doing business in India are the red tapes bound tightly by the bureaucracy...However in spite of all this I am not very sure we are going in the right path, I am apprehensive that SEZs while possibly leading to rapid growth when rightfully used might build greater divides between regions which come under it and those which don’t. Thereby it increases the already skewed development path that India is following. I believe that ultimately SEZ would tend to work in favour of the very BABUs whom we are trying to cut to size as they still are in positions to grant favours to specific private enterprises towards reaping benefits of these SEZ. Although everyone would like to make money on a real estate boom but the bubble may soon burst if it is not supported or protected through solid means. I believe that if the intent was to give industrial growth in any region a spurt then it should be looked at in the right perspective. Lets try to uniformly reduce the bureaucratic red tape. This would help in genuinely boosting the growth of industries rather than providing short cuts in limited regions. I believe that instead of providing a cure to the root cause of our inability to attract more industries we are trying to address it superfluously and allowing industries to prosper in certain regions. This may prevent naturally advantaged regions (post removal of as much bureaucracy as possible) to be left in the lurch in its bid to attract the most favored industry. This will only perpetrate inefficiencies (which are skewed but are still real) which may prove to be costly to India in the long run.

Of course we can still live by the Keynesian philosophy ‘In the long run everyone is dead’