Origins
Interestingly, the concept of special economic zones can be traced back to the British colonial rule in India. Its origins date to 1824, specifically to the Bengal Regulation Act I and was premised on the principle of “eminent domain”. It is the legal principle which allows the State to take any private property for public use for the common good. These included land for constructing canals, roads, railways, and other public work projects. By around 1857 separate laws in several Indian territories such as Bombay, Madras, and Calcutta were consolidated and codified into a single law applicable to all areas of British India. This law further incorporated provisions of other laws during the British rule in India until it became “The Land Acquisition Act of 1894”. The act of 1894 mandated the computation of compensation for lands being acquired based on current fair market values and added a “solatium” (additional compensation over and above the market value because of the involuntary nature or “forced” parting with the land). The solatium is actually for “injured feelings” or “mental anguish” over losing control of land that had so much emotional or cultural value to the previous owner. The law further provided for the right of appeal in a civil court in case of disputes over fair compensation. It has remained basically unchanged to this present day and is still being used by the Indian government in order to create its special economic zones.
This site give a more lengthy discussion of the true situation prevailing in India today with regards to the operations of special economic zones. The author regards these zones as nothing more than “legalized tax evasion” and “justified land grabbing”.