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The Cost of Global Competitiveness: Assessing the Impacts of Special Economic Zone Policy on the Working Class in Bangalore

George, Jessica

Bangalore has been lauded as a positive example of economic development in the global South because of its success in attracting investment and fostering the development of small and medium enterprises (SMEs) as well as multi-national corporations (MNCs). The trend of economic liberalization and deregulation within Bangalore in particular has been furthered by the establishment of Special Economic Zones (SEZs) within which firms who operate are granted a variety of tax and duty exemptions, as well as exceptions from several labor laws. This has thereby resulted in tremendous economic growth within the city and established Bangalore as a major global hub of innovation. Simultaneously with the rise of a growing middle class however, inequality has grown within the city, as lucrative opportunities cater to a particular segment of society possessing certain levels of higher educational attainment and skills. The establishment of SEZs has undermined many of the labor rights that have long been established in India for the sake of economic growth. This study examines why individuals choose to work in high-technology SEZs and how employment within these firms impacts workers. Furthermore, this study investigates how the working class has been impacted more broadly by the approach to economic development being taken within the city as exemplified by SEZ policy. It is hypothesized that laborers within SEZs are worse off than those in domestic tariff areas (DTAs) in terms of security of employment and bargaining power, but they are willing to work for firms within these zones because higher average wages translate to compounded benefits to their livelihoods. The impacts of SEZs in Bangalore are explored through a quantitative characterization of government employment and financial data, combined with qualitative data from interviews with government officials, NGOs, trade unions, private sector representatives, and blue-collar workers. Findings suggest that the primary impacts of SEZ policy on workers are the proliferation of subcontracting and associated employment insecurity, heightened barrier to entry for decent employment due to a widened skills gap, and resulting affordability challenges within the city. This study argues that there are opportunities for increased inclusivity in each of these areas existing at the intersection of interests of different stakeholder groups.

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More About This Work

Academic Units
Urban Planning
Degree
M.S., Columbia University
Published Here
October 22, 2015
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