Economic reforms in India have always been a two-edged sword. On the one hand, the government has to take initiatives to boost foreign trade and attract FDI. This is to boost exports, facilitate imports, and generate employment opportunities in the country. On the other hand, the government also has had to face resistance from opposition parties, who represent the voices of people directly affected by the government's policies.

The agitating population at Nandigram in West Bengal is an example of opposition to the Indian government's SEZ policy. In the face of fierce opposition to the West Bengal state government's efforts to acquire land for developing an SEZ at Nandigram, the Union Government has now amended its SEZ policy. The new policy has two major implications: 

1. State governments cannot acquire land for SEZs on behalf of private developers or form JVs with them if they do not have land for the proposed SEZs.

2. There is now a cap of 5000 hectares on the size of SEZs

The changes in SEZ policy have forced developers like Reliance, who were planning to develop an SEZ of 10,000 hectares, to redefine their strategies. Another problem is that with every election and with every change of state government, the decisions taken and clearances given by previous governments are put under review by succeeding governments. This further delays the implementation of policies. India is a parliamentary democracy, where every new initiative has to be approved by the majority, only then can it be translated into reality. To obtain this majority is a time

consuming process, which creates delays in implementing new developmental ideas, China does not face such compulsions and is way ahead of India in economic development.

Learning Objectives

1. Trace the history of SEZs in India and find out how the SEZ policy has evolved since its inception.

2. List the reasons for which the government had to change its policies and comment on whether such 

       changes could have been avoided.

3. In light of your findings, prepare a plan of action for the successful implementation of projects,  

      which are important for the economic development of India.