The tale of Mundra’s rise from a barren hinterland to the largest multi-product special economic zone (SEZ) spread across 15,946 acres has been quite extraordinary. Yet it has often been a victim of unwarranted political cross-fire that stems from a misleading reportage of the prices paid by the Adani Group to acquire lands since 1993.
Allegations purport that the price paid by the Group has been as low as Re.1 per sq. m. – hence the coinage of ‘toffee rate’. But it is clear that this concessional pricing was approved after required systematic procedures were carried out and proper legislations were passed, all within the realms of the Special Economic Zone Act of 2005.
With this endless barrage of political propaganda bent on tarnishing the reputation of India Inc. and the fate of SEZs in the country, only one thing stands to lose: the foundation of our national economic prosperity. Ultimately, though, it is the truth that triumphs. And the Adani Group hasn’t relinquished their plans to stand by it.
Understanding SEZs
In essence, a Special Economic Zone is defined as a geographical region where economic laws are justifiably more liberal than the laws in the entire country given its immense economic potential. In 2005, when the Special Economic Zone Act was approved in India, the significance was akin to the liberalization policies introduced in 1991.
For the first time, the floodgates had been opened for unprecedented industrial, socio-economic, infrastructural, and employment rate growth of the nation. Finally, the time and opportunity had arrived for the vast swathes of India’s land that had long been left impoverished, inhibited or simply ignored. And it all hinged on luring large scale investments from nation-building conglomerates via land acquisition, business and tax incentives.
So, when the political machinery churns out sensationalist propaganda alleging land acquisition by conglomerates such as the Adani Group at astoundingly low rates, it is merely misconstruing the established law to deceive common folk.
There’s a reason why land for SEZ is allocated at truncated rates. The end goal is not to benefit or favour a conglomerate by providing them land at a nominal price just so the conglomerate could sell it at a profit. There is a business obligation on the corporation’s behalf to best utilize this national resource and turn it into a behemoth of economic prosperity, the returns of which shall immensely benefit the government, the exchequer, the society, and the country as a whole.
With this perspective in mind, it is easy to realize that ultimate judgement criteria of Adani Group’s Mundra SEZ project and its success is not the price at which the land was acquired, but the profits that it is yielding now. And it is clear that the profits are not Adani Group’s to cherish alone, as defined by the company’s India-centric vision.
Standing By the Truth
It was in 1993 that the Adani Group began acquiring land near the underdeveloped coastal town of Mundra in Gujarat. The objective was to build a commercial port in the region. Consequently, in 2006, the then Chief Minister of Gujarat, Narendra Modi, allocated only 5000 acre to the Adani Group who had actually planned to set up a world class special economic zone in a 10,000 acre area.
That ultimately it was the UPA central government which naturally had the final say on this allocation under the SEZ Act it introduced in 2005 shatters the misconception that the Adani Group had received favours from one particular government. It is interesting to note that Narendra Modi’s Gujarat regime accounts for only 33% of the total land acquired by the Adani Group. In fact, throughout their incremental land acquisition initiatives in Mundra, the Adani Group had to deal with a lot of different government regimes, from state to centre.
It was Chimanbhai Patel-led Gujarat government in 1993, then the Keshubhai Patel-led BJP state government in 1995, followed by the Shankersinh Vaghela-led Rashtriya Janata Party in 1996, and finally the Narendra Modi-led state government since 2001. From Re.1 per sq. m. in 1993 to Rs. 15 per sq. m. in 2006, the concessional rate remained more or less the same after accounting for inflation. And these rates did not fluctuate much either when the Adani Group acquired land in Rajasthan, Maharashtra, Chhattisgarh, Odisha, and Haryana – different states ruled by different political parties.
Moreover, the fact that all the land acquisition proceedings went smoothly for the Group further justifies that the activities wer carried out under proper rules and regulations. As for the low price of land in and around Mundra, it is worth knowing that when the Adani Group first set its sight on the region, it was an arid and barren land with no scope of vegetation and no infrastructure. In short, the land allocated to APSEZ and the port was a government wasteland, grazing land, and an intertidal land which would flood regularly.
Also, according to sources, the ready reckoner rate of Mundra’s land in 2006 was around Rs.50 per sq. m. Therefore, under the provisions of a SEZ, the purported Rs.15 per sq. m. that the Group paid to Narendra Modi’s state government at that time is hardly controversial. Twelve years on, comparing a structurally-developed and electrified Mundra’s current land prices with those of 2006 or even 1993 is grossly unfair.
One has to understand that the Adani Group never intended to purchase land and sell it off for a profit. Their entire vision is built around creating assets of economic significance for the nation. Thus, the acquisition and transformation of Mundra’s land is proof of what a carefully planned SEZ can do in terms of socio-economic development.
Setting a Benchmark
Despite the destabilizing efforts of political henchmen and biased journalists, the story of the Mundra port and SEZ never really floundered. And if the country’s forthcoming Sagarmala project is to shape the fortunes of the nation, then we shall be needing more Mundra-inspired coastal SEZs to spring up.
Today, the Mundra port is the largest commercial port in India with a record 100 million tonnes of cargo handled in 2013-14 alone. It has, by far, the largest CAGR of all ports in India at 35%. Lying at a critical maritime junction in the Gulf of Kutch, and blessed with state-of-the-art road, rail, air, and pipeline connectivity, it is a major entry point of dry bulk, break bulk, liquid and automobile cargo in the country. The port is also equipped with all modern storage facilities.
As for the encompassing SEZ, the Adani Group has developed excellent infrastructure right from internal roads, business districts and industrial clusters with all amenities, to port-based manufacturing hubs, and community facilities such as schools, hospitals, housing, etc. Powering it all is the world’s largest private single-location thermal power plant. Special attention has also been given to nurturing local communities and preserving biodiversity with sustainable development.
Imagine having clusters of such SEZs all over the country, then. In Adani Group’s Mundra SEZ, India is lucky to have the blueprint for a thriving future.
Yet, like a broken record, opponents of the present government regime have tried to falsely implicate the Group in having received ‘special favours’ from political allies to build its Mundra project. It was a focal point of the national election campaign in 2014, and is now being cleverly turned into another incendiary tactic to influence public opinion in the Lok Sabha elections scheduled for next year.
However, this attempt to mar the growth story of Mundra doesn’t take into account facts which naturally absolve Adani Ports & SEZ (APSEZ) of any ill-doing in land acquisition. In fact, what it does point to is something far more significant than debating over land acquisition rates: the end result of land acquisition.
After all, there’s a vast difference between the Mundra of today and the Mundra of the day when the Adani Group began legitimately acquiring its lands. The difference, evidently, is unconceivable progress. The difference is complete dedication to the cause of building a nation.
At the end of the day, it only strengthens the case for establishing similar SEZs across India. And this can only be achieved if political mud-slinging is kept out of the way.