In addition to what I mentioned, there are other misleading info all throughout the article.
1) The article says "(for SEZs) All corporate taxes are waived for the first five years,..." This is NOT true. the Income tax is waived ONLY for export income (http://sezindia.nic.in/HTMLS/about.htm). 2) The artcile says " Labor laws find only a rudimentary application in the special economic zones." However, the SEZ Rule says " The Developer shall abide by the local laws, rules, regulations or bye-laws in regard to area planning, sewerage disposal, pollution control, labour laws and the like as may be locally applicable." As a matter of fact, I could not verify many of the claims by the author after going through the SEZ Rule and Act. It probably does not make much sense to pick up an article by any Tom, Dick, Harry in an attempt to paint India in black. --- Krishnendu Chakraborty <[EMAIL PROTECTED]> wrote: > Couple of points .... > > 1) The TN govt DID NOT provide land at no cost. > The > land was Free Hold instead of leased. The author > does > not seem to understand the difference. (Refer > http://books.google.com/books?id=Au3R0DblY7wC&pg=PA56&lpg=PA56&dq=ford+mahindra+tamil+nadu+exemption&source=web&ots=p1RzEZNoXT&sig=9T-FNqYOxcpPM6neQ6eLNZp5DKI&hl=en#PPA57,M1 > Page 56-57) > > > 2) What the author fails to see is the anciliary > industries. For example , in case of Ford, the > parts > suppliers of TN lobbied to get the Ford factory. > The ancialiary industries offer much more job then > the > main industry. > We have seen this happening in Western and South > India > and lately in WB. > > > 3) The author says that the Govt offers Tailor Made > incentives which are secret. I am not sure how the > "secret" info on TN-Ford negotiation became public. > > However, everywhere including US, Govt offeres > incentive to investors. The same report which I > referred to says about US (Page 60). It also says > that in US the negotiations are often done in a > clandestine manner. > > > 4) The author says "If, on the other hand, the > state > had higher tax revenues, it could itself create > jobs, > for example in the rural economy." However, what > the author fails to see (but even a layman can > understand) is that the potential of earning tax > depends on number of industries and jobs. So, if > the govt raise the tax to (say) 30% and there > are > 0 industries Govt will not have money even for basic > development not to talk of creating jobs. On the > other > hand, by getting new industries, they are getting > corporate tax, and tax from anciliary industries. > Further, the subsidized electricity for Ford was > only > for 4 years and after that the govt makes money out > of > that too .... at industrial rate. > > 5) The original article which started this > discussion > (NY Times article) praised Chinese model. However, > the Berne Declaration site (from which > http://www.evb.ch/en/p25010663.html has been picked > up) also cites article on Chinese model (by same > author). It says " The "Chinese economic miracle" > is > based on the exploitation of rural migrant workers." > > (http://www.evb.ch/en/p25010664.html). Does that > mean ALL developing countries are going the wrong > way? > I have seen some assam netters going ga-ga on > Chinese > model while belittling all of Indian developments. > What is their view on this? > > > > Does anyone have access to the McKinsey report which > the author refers to ? > > > > > **************************************************************** > > This is a story related to the issues involved in > the > NY Times > article about the Good Life in Gurgaon. And it > touches > on some of the > points raised by Uttam, and how it impacts the > PUBLIC > GOOD. > > http://www.evb.ch/en/p25010663.html > > > > Note: > > A report by the McKinsey Global Institute came to > the conclusion > that the investment decision of corporations usually > was not > dependent upon these benefits. Especially in booming > markets like > India, corporations want to be present in any case, > but are > nonetheless happy to take advantage of the benefits > that are offered > to them. India's elites are not completely innocent: > The success of > having attracted a prestigious foreign corporation > to > one's own state > is a great way to show off. It is India's poor who > pay > the price. > > cm > > *************************************************************************************************************** > > Who Pays the Price for India's "Corporate Welfare"? > (28.01.06) > > > > Two reasons are given for India's economic > attractiveness: > well-educated, inexpensive high-tech workers and a > booming internal > market. But there is a third, more important motive > that attracts > investors: the abundance of incentives and sweetners > offered by the > Indian government to foreign corporations. > > "Incredibly India: The Biggest Democracy for Global > Investors": With > this slogan, omnipresent in Davos, India takes a jab > at China and at > the same time makes clear: India is rolling out the > red carpet for > foreign investors. The enticements include tax > breaks, > tariff relief > and inexpensive building sites already outfitted > with > the necessary > infrastructure. Exemptions are also made to the > applicable > environmental and labor legislation. Since the > individual Indian > states are competing for investments, firms can > combine individual > and state benefits. And for large projects there are > not only the > standard incentives, but also tailor-made contracts > and incentive > packets, whose details remain secret. > > The most extensive enticements are granted in the > special economic > zones, which are under the direct authority of the > central > government's Trade and Industry Ministry. Eleven > such > regions already > exist, and a further 42 have been approved. The > Trade > Minister > manages these zones himself; his colleagues in the > Departments of > Environment and Finance have no say. Former finance > minister Jaswant > Singh has complained, in vain, about the loss of tax > authority over > these zones. > > Exemptions Without Rules > Labor laws find only a rudimentary application in > the > special > economic zones. All firms are treated as public > utilities, which > means that workers may not strike. A toy factory has > the same status > as state-operated water and electricity utilities. > Normal working > hours and overtime as well as wages do not need to > be > made public, > and there are no regular inspections for compliance > with safety and > health standards. In addition, no contributions need > to be paid into > the state's social insurance koffers during the > first > five years of > operation. > > === message truncated === _______________________________________________ assam mailing list assam@assamnet.org http://assamnet.org/mailman/listinfo/assam_assamnet.org
