special economic zone

SPECIAL ECONOMIC ZONE

Presented by : ABHIJEET KUMARURBAN PLANNING III SEMVNIT NAGPUR

S p e c I a l e c o n o m I c z o n e

INTRODUCTION

•Special Economic Zone (SEZ) is defined as "a specifically delineated duty free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs".

•SEZs an engine for economic growth supported by quality infrastructure complemented by an attractive fiscal package with the minimum possible regulations.

•Government of India have notified Special Economic Zones (SEZs) Act 2005 and notified Special Economic Zone Rules 2006 with a view to augmenting infrastructure facilities for export.


CHRONOLOGY OF SEZ FRAMEWORK

Export Processing Zone (EPZ) policy1965.

1st EPZ was set up in Kandla (Gujarat)

In 1990s, as a part of reforms,

powers delegated to

zone authorities.

New Policy in April 2000

Special Economic Zones Act MAY 2005.

Full law and rules effected

February 2006.

» Free Trade Zones (FTZ) » Export Processing Zones (EPZ) » Free Zones (FZ) » Industrial Estates (IE) » Free Ports » Urban Enterprise Zones

SEZ CATEGORIES


HISTORY OF SEZ’s IN INDIA

• During the past four decades many developing countries have been creating special zones to promote their exports and earn foreign exchange.

• The term Export Processing Zone (EPZ) was first coined to identify the Shannon zone set up in Ireland in 1958.

• India established its first EPZ in 1965 in Kandla (Gujarat)

• In 1984 EPZs were established in Cochin (Kerala), Falta (Calcutta,now Kolkata), Madras (now Chennai) and NOIDA (Uttar Pradesh).

• The Visakhapatnam EPZ (Andhra Pradesh) was established in 1989 and the Surat EPZ (Gujarat) in 1997.


FORMATION OF ACT’S

With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances; absence of world class infrastructure, and an unstable fiscal regime and a view to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April 2006.

SEZ Act, 2005

•The main objectives of the SEZ Act are:

GENERATION OF ADDITIONAL ECONOMIC ACTIVITY

PROMOTION OF EXPORTS OF GOODS AND SERVICES

PROMOTION OF INVESTMENT FROM DOMESTIC AND FOREIGN SOURCES

CREATION OF EMPLOYMENT OPPORTUNITIES

DEVELOPMENT OF INFRASTRUCTURE FACILITIES


STATUS OF STATE SEZ ACT’S /POLICIESStates where SEZ Act has been

enacted & is in force


ECONOMIC BENEFITSSEZ policy has directly benefited economy in following ways: Employment Generation : SEZs generate direct employment for

skilled and unskilled labour ; indirect employment and employment for women workers.

Skill Formation: Formation of SEZs and new job requirements increase firm level activity whereby the labour force acquires skills from within the firm through training and learning.

Attract investors:: SEZs offer a highly conducive investment scenario for developers. No tax during development and operational stage. At profit stage 100% income tax exemption for Ist 5 yrs, 50% for next 5 yrs. Technology Upgrading: SEZs attract export-oriented FDI and promote other forms of collaboration between local firms and MNCs. Exports: EPZ exports registered an impressive growth rate over the period 1966 to 2002. EPZ exports increased in India from less than Rs.1 million in 1966 to over Rs. 97727 million in 2002.

Manufacturing Sector: Share of manufacturing industry in the exports grew from negligible percentage in 1970 to above 6 % in 2005.

(Sources: Ministry of Commerce, Economic Survey)


SEZ TYPOLOGY


CATEGORY WISE



AREA ALLOCATION

SECTOR SPECIFIC SEZS

•PHARMA •IT/ITES •GEMS & JWELLERY •BIO TECHNOLOGY •CHEMICALS •CONSUMER APPLIANCES •MEDICAL EQUIPMENTS •ENGINEERING BASED •APPAREL & READYMADE •AUTOMOTIVE COMPONENTS •TELECOM EQUIPMENTS •R& D •PROCESSED FOOD & BIO EQP. •ENTERTAINMENT & RECREATION

AREA ALLOCATION IN TERMS & USE


DEVELOPMENT NORMS

Development Norms for Non Processing Areas in SEZs. Permissible FAR and land area is based on the following assumptions

• The area permissible for the non processing use is Max 50% • The norms are based on 100 FAR on total area under non processing zone • Min area for Sector Specific SEZ – 100 ha • Min area for IT/ITES, Biotechnology, Gems and Jewellery SEZ- 10 ha • Min area for Multi Product SEZ – 1000 ha.

DEVELOPMENT GUIDELINES – MULTI PRODUCT SEZ



DEVELOPMENT NORMS



AREA REQUIREMENTS


ENTITIES OF SEZ


SEZ TYPOLOGYSEZs in India At present there are Eight functional SEZs located at: •SantaCruz (Maharashtra), • Cochin (Kerala), • Kandla and Surat (Gujarat), • Chennai (Tamil Nadu), •Visakhapatnam (Andhra Pradesh), • Falta (West Bengal)• Nodia (Uttar Pradesh) &• Nagpur (Maharashtra) •Raipur (Chatisgarh) •Indore(Madhyapradesh)•Jamshedpur(Jharkhand)•Indore(Madhyapradesh) •Satna(Madhyapradesh)


SEZ’S COMPARISON

•By the end of the 1990s, it was found that India’s EPZs were not performing as well as China’s SEZs.

•Major reasons behind poor Indian SEZ’s performance w.r.t China.

Limited scale and overcrowding. Inadequate logistic supports. Poor infrastructure.

Governments in difference and red tapism in matters of foreign direct investment. Lack of clarity in incentive packages.

Poor coordination between state and municipal governments with central


CASE STUDY

FALTA SEZ West Bengal

•Set up by the Government of India in the year 1984. •Subsequently, two other SEZs were set up. They were MANIKANCHAN SEZ for gems and jewellery and WIPRO SEZ for IT and ITES, located at Salt Lake, Sector-V, Kolkata. –It is about 55 kilometres from Calcutta city and 45 kilometres from the southern suburbs. –It is well connected by a developed network of roads including a State highway, two ports at Calcutta and Haldia and International airport at Dumdum.

•Infrastructural Facilities available at FALTA SEZ Gross area 280 acres (acquired 87acres and transferred from CPT 193acres). Location - Panchayat area. Area Developed- 253 acres (full infrastructural facilities) Area under development 27acres Built - up space - SDF-15570 sq.m.(2nos.) - fully allotted. Industrial shed- 15350sq.mtr.(7 nos) - fully allotted. 1 million liters per day water supply with drainage facilities. Electric sub-station for dedicated power supply for all categories, supplemented by local sub-stations.


CASE STUDY


NEEDED GROWTH

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