Sunday, April 24, 2016

734 (Part 3/100) of DILEMMAS AND ENIGMAS OF INDIAN ECONOMY - Review of One Eyed King Statement of Shri Raghuram Rajan - Frog Kings on Joy-rides

This is in continuation of our blog posts Click to go to post 724 (part 1/100), and Click to go to post 732 (part 2/100), of India's Economic and Financial Dilemmas and Enigmas, a sequel of comment by RBI Governor Shri Raghuram Rajan, that India is like 'a one-eyed king', whereas the world is full of blindness. We are, now, taking up the part 3/100. India's Prime Minister, Cabinet Ministers, Chief Ministers of State, People's Representatives, everybody 24/7/365 assure people that foreigners will start new industries in India and give employment to thousands of people. Prompted by these assurances, people day-dream that by becoming employees of Multi National Companies (MNCs) they can have all comforts and luxuries in the world. We shall, now see, one live example of one such Employment Generator called Brandix Apparel City in Achyutapuram, near Visakhapatnam.

Govt. of Andhra Pradesh, has allocated 1000 acres land to the Brandix Apparel City, on a lease of Re. 1 per acre. That means, the Brandix Apparel City will be paying Rs. 1,000/- as rent for 1000 acres. This is nothing but giving 1000 acres FREE.

Question: What additional concessions / freebees are given to SEZs?

Concessional income tax rate of 20% for a period of 15 years from the date of commencement of commercial production as against present corporate tax 32.45%.

Units can import goods without payment of duty for manufacturing and operation purpose.

Services tax is exempt.

Procurement of goods from Domestic Tariff Area (DTA) without payment of duty.

DTA sales are permissible (subject to duty), provided net foreign exchange earner.

50% exemption on Stamp Duty, Registration Fee on transfer of lands meant for Industrial use in the Special Economic Zone area.

Complete exemption of stamp duty and registration fee for loan agreements, credit deeds, mortgages and hypothecation deeds executed by the SEZ Units for assets in the SEZ in favour of banks or financial institutions.

Other state taxes including sales tax, VAT, luxury tax and entertainment tax and state duties on transactions within SEZ. Sale tax and other State Taxes on inputs (goods and services) made to SEZ units from Off Zone suppliers within the State.

The State exempts Power in SEZ from Electricity Duty and Tax.

Captive Power will be allowed in SEZ. Exemption from wheeling charges and grid protection charges levied on Captive Power.

NO requirement of Environment Impact Assessment (EIA) approval.

After giving numerous concessions in a gold platter, how should an SEZ function?

As per the MOU the Brandixapparelcity entered into with the Govt. of Andhra Pradesh, the SEZ has to provide employment to about 60,000 persons. But, it is reported to have provided employment only to about 16,000 persons. Leaving aside the quantity of employment generation, the "quality of employment" also warrants attention of the Law Enforcing Authorities in INdia, and the State Andhra Pradesh.

I.L.O. = International Labor Organisation. Its organ, International Labor Office, has an ILO Bureau for Workers’ Activities (ACTRAV). In March 2012, they have got a report prepared by Pallavi Mansingh, Suneetha Eluri and Sreejesh N.P., Centre for Education and Communication (CEC), New Delhi. A pdf copy of this report can be downloaded from the following link:- Click to download the ILO Report in pdf. It has 56 pages. It contains not only Brandix SEZ, Achyutapuram, but also other SEZs in India.

Here is an extract from the ILO Study, Page 50 of the total 56 pages, which shows the State of Affairs, apparently prevailing at Achyutapuram SEZ.

3. Atchutapuram SEZ, AP: Yet another SEZ under operation in Visakhapatnam is at Achutapuram; 9200 acres of land were acquired for this SEZ alone. There are 20 units, which employ a young workforce between the ages of 20 and 40 years. Brandix India Apparel, which is a textile factory, employs 16,000 workers in this SEZ.

Most of the workers are women and they are forced to work continuously for eight hours in a standing posture. Several cases of harassment have been reported to CITU. There are restrictions over women workers even going to toilets. Women workers are asked to attend the call of nature within a stipulated time of 5 minutes. If any worker fails to report back in the said time, male supervisors bang on the toilet doors. Several cases of sexual harassment are reported from here and women workers are not allowed maternity benefits.

Whenever workers revolted, the management used to file false cases against them. The police resorted to intense repression in many instances. Once, when CITU leaders asked the police why there was this kind of an unusual response to workers, they responded by saying, “What can we do? The orders are directly coming from CM’s office!” Even the police is helpless as there are strict orders from higher offices to curb the struggle by all means.

In spite of the huge repression, CITU has been able to register unions in some of the SEZ units. But there are several restrictions: no pamphlet can be taken inside the gate, no one can distribute pamphlets at the gate, and no trade union leader is allowed within one kilometre of the SEZ. Workers come to work from distant places, even 30 to 40 kilometres away. The company arranges their transport in order to prevent workers from interacting with anyone. Buses pick up the workers from their homes and directly drop them at the company door. All these workers are paid very less. This company releases polluted water with chemicals into the sea. There is a direct pipeline from the factory to the sea. Because of this polluted water, the fisherfolk of Pudimadaka are losing their livelihood as the contaminated water is killing the fish. When the fisher community of that area raised this issue, the company entered into an agreement with them. As per the agreement, the company has to employ 3,000 fishermen who lost their livelihood. So far, though, only about 600 fishermen have been given work in the factory. Management pays them Rs 70 to Rs 80 per day, whereas they used to earn Rs 300 to Rs 400 per day as fishermen. When they demanded a wage increase, all of them were retrenched. The agreement is null and void now.

If the above was the situation prevailing in 2012, the situation ought to have improved by 2016. But, apparently not. Now, the situation has culminated, to a strike by its Women Workers.

Another picture, kind courtesy BrandixApparelCity's Brochure.

It appears that the Employers at the ApparelsCity seem to be paying THE ABSOLUTE MINIMUM REQUIRED BY LAW (MINIMUM WAGES ACT or whatever else it is), OR something slightly above it, so as to avoid prosecution. Branded Apparels command premium prices in the world, not to speak of India. That means, the Manufacturers in the SEZ should have been earning super-profits by charging high prices to the consumers, and paying low wages to the Laborers. The Manufacturers are also swallowing all the concessions given by Central and the State Governments.

Karl Marx's Theory of Value should immediately come to our mind. According to the Theory of Value, the "Value Addition" made by the Workers to the merchandise, and recovered from the consumers by charging Skimming Prices from them, are knocked away by Manufacturers.

"Male Supervisors banging on the toilet doors of the Women's Toilets" !!! Even prisons may not have this type of conditions. We cannot blame the Male Superviors themselves personaly because, they might have been acting under the orders of the Manufacturers and the SEZ Owners. Like the oggresses who were entrusted the duty of guarding Sita in Ashoka Gardens by the Ten Headed Ravana, the Male Supervisors who banged the doors of the female toilets must be under direct or indirect pressure from their employers.

The ILO's Report clearly shows the helplessness of the Police, because they get direct orders from CMO (Chief Minister's Office).

Now, our readers can appreciate why our Rulers can be compared to "Frog-Kings". India is not a "one-eyed king" as made out by Mr. Raghuram Rajan, RBI Governor. Our Rulers are the FROG-KINGS who are taking joy-rides on the FOREIGN INVESTOR SERPANTS.

TAIL PIECE धुमकेतु తోకచుక్క

Mr. Chandra Babu Naidu, the Chief Minister of Andhra Pradesh will be performing the House Warming Ceremony of the Temporary Secretariat Building of the Andhra Pradesh Government, at Velagapudi Amaravati Capital Region, on the early morning of 25th April 2016. Why such a hurry? The State was separated in 2014. The Government slept upto Oct. 2015 without deciding on setting up a temporary Secretariat in a leased building, or constructing a temporary Secretariat building.

The construction of the building has not reached any stage of completion. It may be completed, as per schedule by June-August 2016. Hurrying up the builders to speed up construction, if done beyond a limit, can be extremely dangerous. They may compromise on quality. They may compromise on "minimum waiting period" required at different stages. If floors are raised on "raw - moist" pillars / foundations, scaffoldings may collapse. When Cement Concrete Mixtures are used, minimum time and curing is to be given for the chemical reactions which have to take place between limestone and sand. Engineers to oblige Mr. Chandra Babu Naidu, may say "yes" every wish of his, and his astrologers.

But, Mr. Chandra Babu Naidu is under an addiction of conforming to the dictates of self-styled astrologers.

According to astrologer, there are no auspicious days ahead in the year, for performing house warming ceremonies and entering new buildings. Next six months, there are not going to be any marriages performed in Andhra Pradesh.


Subject to corrections and deletions. To continue. सशेष. ఇంకా ఉంది.

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