High-Tech Revolution Remaking Rural India

By Rama Lakshmi
Washington Post Foreign Service
Monday, October 1, 2007

NEEMANA, India -- A chorus of clanging metal and clunking lumber burst the morning air in this village as farmers reclined on jute cots, smoking water pipes and supervising the construction of fancy mansions with marble floors and spiraling columns. Along narrow dirt tracks, buffaloes and tractors jostled for space with shiny new sport-utility vehicles. A farmer in town noted that he had recently bought a "foreign breed" dog, a German shepherd. He said he calls his new pet "Sweetie."

The village here in the northern state of Haryana oozes new money. Residents have sold most of their farmland to a private company for the establishment of a special economic zone, one of more than 250 that the Indian government approved last year. Now, the sleepy village of Neemana, known for its wheat and mustard fields, is on the cusp of a field-to-factory shift that is transforming the lives of its people.

"I spent my life looking at the sky for rain. There was no irrigation, the underground water was saline. I farmed because I had no other choice," said Surender Singh Guliya, 35, who worked his ancestral land in Neemana for years before selling it to a manufacturer.

"The company says they will build factories and airports here. They are showing us a dream. If it comes true, my children will have urban jobs and fine lives," he said. "Farm work is very hard. You grow old very fast."

The weekly magazine India Today has called special economic zones like this one "the biggest push for industrial expansion in post-independence India." By offering businesses tax incentives and insulating them from government interference, India hopes to boost manufacturing and exports. The businesses will develop their own infrastructure, including power plants and road networks -- a testament to the fact that emerging economies are not always able to build the foundations to help businesses flourish.

While India's economy is growing at an impressive 9 percent annually, that growth has left much of rural India untouched. Two-thirds of the country's people still struggle on $1 a day, and more than 40 million are registered as unemployed.

In establishing special economic zones, or SEZs, India is taking its cue from China and Brazil, among other countries, which have used similar zones to kick-start their economies and create millions of jobs.

The SEZ in Neemana and nearby villages is being run by Reliance Industries. The Mumbai-based company is building a gas-fueled power plant and an airport; the zone will serve as home to a host of Indian and foreign companies in the biotech, nanotechnology and information technology industries.

Across 25,000 acres of farmland, Reliance plans to build roads, homes, schools, hospitals, and shopping and entertainment plazas. The company has assured villagers that they will make up half of its workforce and has opened a training institute for village youth.

"What is going to happen in this region is nothing short of an industrial revolution," said Satyender Duhan, the top government official for the 248 villages in the region that includes Neemana. "Agriculture is overburdened and unproductive. Farmers are buried in debt. The SEZ brings mobility and will fuel urbanization. We cannot visualize the change. . . . This place is going to be unrecognizable in 10 years."

Unlike in China, where the one-party system meant there was little if any resistance to SEZs in Shenzhen and Xiamen, the prospect of special zones drew fierce opposition in India's Parliament and on the street. Last year, farmers groups said the SEZs would amount to a land grab for the private sector and would make India vulnerable to food shortages. Trade unions also expressed fears that labor protections would be weakened.

To calm those concerns, the government assured farmers that fertile farmland would not be targeted and told trade unionists that labor laws would be upheld.

Still, critics fear that the focus of SEZs on high-tech industries will leave rural Indians behind. Farm laborers from lower castes in Neemana have no land to sell; their wages have been halved in the past year. Others bemoan the breakdown of the village social structure in the race toward urbanization.

"It was like a ghost had entered the village last year, everybody ran in one direction. They all wanted to sell their ancestral land," said Omvati Harichand, 70, sitting on a cot. "What are we without our land? We will become cities and lose our culture. Sons are fighting with their fathers over land and money in the past year."

But it is the younger generation in the villages that is driving the change. Flush with money from land sales, they are building their dream homes, buying fancy cars and throwing lavish wedding parties. Many of them are also buying land elsewhere, opening shops and small businesses. A few have started running fleets of cabs for call centers around New Delhi.

A year ago, the local banks in Neemana could boast only three accounts that held more than $200,000. Today, there are 3,600 such accounts. Registration for new vehicles in the area is 10 times what it was a year ago.

Hansraj Singh, 25, sold 10 acres of family farmland against his grandfather's wishes. With the money, he bought two cars, one to drive inside the village and another to travel beyond it. He invested the remainder in an urban plot of land where he hopes to build businesses.

"The old people are stuck in the old ways. In a few years from now, there will be no dirt roads, no open sewers in this village," Singh said, tapping his chin with his cellphone. "And our children will speak English."

© 2007 The Washington Post Company