Research on Special Economic Zone

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Objectives

• To find potential of SEZ at Nasik

• To find how many units would be willing to invest in SEZ at Nasik

• To find the area they could be willing to buy

Target industries

Potential of sunrise and high growth industries was specifically researched like IT, Biotech, Pharmaceuticals, Food Processing mainly due their growth prospects and availability and manpower, proximity to Mumbai and Pune. Besides these following industries were researched for their scope: food and beverages, tobacco products, wood products, leather products, garments, paper products, rubber products, plastic products, petroleum products, fertilizers, speciality chemicals, petro chemicals, pharmaceutical formulations, cement, steel, aluminium conversions, copper, machine tools, electrical equipment, industrial machinery, electronics and telecommunications equipment, semi conductors, reconditioned car unit and auto components, trading and brokerage, BPO, financial services, Bio informatics.

Scope of research

247 industries in Mumbai, Pune and Nasik were surveyed

Mode of data collection

Interviews in the form of questionnaires, discussions were undertaken. References from various publications, business magazines, newspapers, internet were also used to collect data.

Duration of research

5 months

Key contents of the report

• Introduction to Special Economic Zone

• SEZ policies

• Indian economy and SEZ

• SEZ success stories in other countries

• Export policies and development of industries

• Industry wise analysis

• Limitations

• Recommendations

ABOUT SPECIAL ECONOMIC ZONE

The SEZ framework is a policy instrument of the Government of India designed to liberalize the country’s trade and investment environment in a series of pre defined geographical areas. While the SEZ policy is one of the programmes of the government to promote exports, it quite clearly breaks new ground. It is the most visionary ambitious and far reaching initiative of the government of india to transform fundamentally the foreign direct investment landscape of the country.

What’s so special about the SEZ?

As with China, India too conceived of the SEZ as a special physical enclave designed to promote foreign investments in a comprehensive range of economic activities from manufacturing at one end to trading and financial services to other with a view to ensuring that these investments operate in an unfettered business environment. SEZ is seen both as a vehicle for surge in FDI flows as well as thrust for exports. SEZ allow India to experiment with radical reform in a sufficiently large geographical area but on a localized basis without the difficulty of introducing such reforms at the national level. The SEZ policy is special in many ways a. range of permissible activities is vast since it covers trading reconditioning, labeling, packaging etc. under the union government’s policy announced in April 2000 businesses will operate under a high quality red tapism, the SEZ will provide high quality world class infrastructure designed to render costs of production, delivery logistics and transactions and competitive on a global basis. The size of the SEZ would be large enough to attract private participation in building infrastructure while the SEZ will be insulated from the domestic tariff area so far as negative influences are concerned.

Key arguments for SEZ

1. Mainly waste and barren land and, if necessary, single crop agricultural land alone should be acquired for the SEZs. If perforce a portion of double cropped agricultural land has to be acquired to meet the minimum area requirements, the same should not exceed 10 per cent of the total land.

2. In the first phase it is proposed to allow only a maximum of 25 per cent of the approved housing while the other approved infrastructure will be allowed to be created as per the developer’s plans and as approved in the Master Plan. The balance housing shall be allowed to be established by the approval committee in three phases depending upon the progress in allotment/occupancy of units in the processing area

Key arguments against SEZs

1. Companies will simply relocate to SEZs – Special provisions have been made to take advantage of the tax concessions in the act under which tax exemptions being offered and little net activity will are applicable only if the unit is not be generated.

2. The act will lead to a large-scale land – The land requirement of all SEZs acquisition by developers, displacement (including those under consideration) of farmers, meagre compensation and is 1,00,000 hectare, which is less no alternative livelihood for them.

SUMMARY OF RECOMMENDATIONS

1. Based on various parameters like availability of manpower, distance between key cities, raw material, willingness to consider the SEZ at Nasik, it was found that industries such as food and beverages, biotech, pharmaceuticals, engineering products are amongst those suitable and keen to set up at Nasik SEZ. As a result, there is a definite scope to set up an SEZ at Nasik.

2. The area in acres that the companies are willing to buy is between 10 to 100 acres depending on the availability and rates

THANK YOU!