The tiny coastal state of Goa has become the first state in India to rescind the creation of special economic zones - putting it into conflict with the central government and powerful developers across the country. Environmentalists and other opponents argue the zones only enrich land speculators and are of dubious economic value to the public. VOA's Steve Herman has more from Goa.

On Vagator beach, below the 17th-Century Chapora Fort, the waves of the Arabian Sea gently wash ashore.

While it may seem calm at sea, Goa is being buffeted by a tempest on land.

A public backlash against rampant land speculation, especially along the much-prized coast, caused the Goa state government to take a stunning, unprecedented action. It has scrapped several proposed special economic zones but the controversy, and political conflict, continues.

The struggle for domination of India's smallest state goes back to ancient times. But some modern day Goans believe that at no time have the stakes been so high, or the region's fragile ecology so threatened.

Native Goan and architect Dean D'Cruz is a member of the task force advising the state government on land policies.

"We're rated nine on the ecological scale, which is just a little behind the Brazilian rain forest. There is a realization that we need to protect this heritage. If we lose it, we've lost the basic charm of Goa," he said.

It is the sliver of Goa's coastal belt that is under most pressure. Goans grumble that land-owners are being seduced by outsiders, from wealthy Indians to Russian organized crime elements, waving huge wads of rupees and rubles.

The state and central government are playing the land game as well, using their powers to grab property and selling it off below market value to corporate entities.

Political science lecturer Cajetan Raposo at St. Xavier's College says that since Goa became part of India in 1961, politics and property have become inseparable here.

"In the present Goa legislative assembly there are at least 15 of them, including the chief minister, who is in the real estate business. The land is directly connected politically," he said.

So when the state government of Goa stopped some developments outright, the political effects were dramatic.

Some top government officials in New Delhi reacted with disbelief, asserting a state cannot make such a unilateral decision after projects have received central approval.

This propelled Goa's seven-month old government, which is backed by the ruling Congress Party, into crisis. Chief minister Digambar Kamat rushed to the capital, reportedly warning that if the land projects were not nullified, he would be forced to resign. That would be a setback for a Congress Party already worried about recent defeats.

Businessman Pravin Sabnis of the Save Goa Movement is skeptical that close ties between property and politics will be severed, whatever happens to the state government.

"Right now there is a lot of political upheaval," he said. "If the present government stays, it will be a deal, some deal with land sharks. And if it falls, also it will be a deal with the land sharks. So either way it's a matter of concern."

Labeled special economic zones or information technology habitats, such land-hungry projects are exempt from normal zoning and regulatory scrutiny.

Proponents of these schemes say they will diversify Goa's economy, long dependent on tourism and mining. The land projects, they say, will attract investors, promote exports of local goods and create employment opportunities. Opponents say the tax-free zones will only further damage the environment and most of the jobs will go to outsiders.

Architect D'Cruz warns Goan patience is wearing thin.

"They're just anti-bad development where it's not planned and it doesn't really benefit Goa as a place which has got a very high ecological value," said D'Cruz.

It is seen as remarkable that protests by Goan villagers alone have halted, without violence, several major projects in the state. All too often, in the rest of India, such confrontations result in bloodshed.

What occurred in Goa, with a population of less than 1.5 million, in a country of more than one billion people, has larger ramifications. Across India, developers striving to satisfy the industrial needs of a booming economy are clashing with traditional land stakeholders.

Urban planner Edgar Ribiero, an adviser to the state government on land use, says he is being peppered with questions from other parts of the country. People want to know how Goa has repelled a seemingly invincible force.

"'How are you all fighting back? How, after approvals have been given, are you in a position to say no?' I said, 'we're not saying it on our own. We're getting the strength of the people to say it'. Other states are saying 'show us the way,'" he said.

The principal of St. Xavier's College, Newman Fernandes, warns that his fellow Goans will not remain passive if other major land projects still on the drawing board are pushed forward.

"Democracy in any country can be successful only if people are alert. We have not been alert in the past. We admit that. But [now] it is just people being motivated in order to fight, in order to be alert and in order to even risk their lives for the values that they cherish," said Fernandes.

It took Goans four centuries to successfully rebel against frequently brutal Portuguese rule. The struggle today over who has the right to develop the land, and how, is not over yet. But the example from Goa shows that the public can demand a greater say over the fate of their land.