National Economic Planning

Industrialization through SEZ

is a boon to the Indian poor
For the motion
 What is Industrialization
• A process of socio-economic change whereby a human group is
transformed from a pre-industrial society into an industrial one.

• A part of a wider modernization process, where social

change and economic development are closely related with
technological innovation, particularly with the development of large-
scale energy and metallurgy production.

• Industrialization also introduces a form of philosophical change,

where people obtain a different attitude towards their perception

NEP - Industrialization through SEZ is a boon to the Indian poor

 NEP - Industrialization through SEZ is a boon to the
Indian poor

What is SEZ

“A specifically delineated duty free

enclave & shall be deemed to be
foreign territory for the purpose of
trade operations , duties & tariffs.”
- Foreign Trade Policy
(2004-09)
 NEP - Industrialization through SEZ is a boon to the
Indian poor

Benefits of SEZ
• Generates additional economic activity.
• Promotes exports of goods & services.
• Encourage investment from domestic & foreign
sources.
• Creates employment opportunities.
 NEP - Industrialization through SEZ is a boon to the
Indian poor

SEZ Act
• EPZ , 1965
• SEZ Policy , April 2000
• SEZ Act 2005 , May 2005
 NEP - Industrialization through SEZ is a boon to the
Indian poor

SEZ approvals & activities

• 303 approved , acquired land, 1400 sq. km.

• 126 enclaves already operating.

• Presidential assent on ,23rd of June, 2005.

• Job generation= 32578.

• ROI 1.5 million$ by December 2009.

• 2007- 2008,531 formally approved & 143 are operating.

 NEP - Industrialization through SEZ is a boon to the
Indian poor

Successful Projects
• TATA’s steel project , in bhilai.
• Lifeline Pvt. Ltd , biotechnology project
based in Chennai.
• L&T shipbuilding ltd. Of heavy
engineering, based in Tamil Nadu.
• Ansal Properties & Infrastructure Ltd.
Biotechnology, based in U.P.
• Textile Park in Punjab.
 NEP - Industrialization through SEZ is a boon to the
Indian poor

Recent development
Total projected exports from all SEZ
2007-2008
Is 67088 crore.
 NEP - Industrialization through SEZ is a boon to the
Indian poor

SEZs: A boon To The Indian Economy

• Influx of huge amounts of investment to the tune of $ 3 b in the very first year of
implementation; accounting for about 60% of total FDI routed to India

• Commerce Secretary Projects creation of more than 8 lac jobs over the next three
years

• SEZs will ensure high growth and removal of regional imbalances as the government
can develop them according to the economic and regional requirements

• Inflow of globally competitive technologies, procedures and expertise from the

foreign participants attracted to SEZs
 NEP - Industrialization through SEZ is a boon to the
Indian poor

SEZs: A boon To The Indian

•
Economy
Creation of an internationally competitive and hassle-free
environment for exports

• Development of world-class infrastructure in and around the SEZ by

the participating enterprises

• Simplification of procedures and other bureaucratic clearances

• SEZs spell wider, stronger linkages with the economy compared to the other
industries elsewhere

• Truly a panacea for all ills of the ailing Indian Economy

 NEP - Industrialization through SEZ is a boon to the
Indian poor
SPECIAL ECONOMIC ZONES (SEZs) IN
CHINA

SEZs in China

Development over the years

- Four SEZs started in 1979 – three in Guangdong adjacent to Hong Kong and one at Xiamen in
Fujian (See Map in Annexure 1)
- Established principally to test the effectiveness of alternative market-based export-led growth
strategy, as in East Asian countries.
- Heavy government investment in infrastructure. Each zone could introduce its own Regulation to
growth investment, approvals and tax concessions.
- Based on the success, in 1984, the SEZ benefits were extended to 14 coastal open cities.
- Economic & Technology Development Zones (ETDZ) and High Tech and New Technology Industry
Development Zones encouraged in coastal open cities.
- In 1985, three development triangles – Pearl River Delta (PRD), the Yangtze River Delta (around
Shanghai) and Minum Delta (around Xiamen) were designated as coastal open areas.
- Hainan Island was declared as fifth SEZ in 1988
- Since then, 52 cities (including all provincial capitals) have become open cities
 NEP - Industrialization through SEZ is a boon to the
Indian poor
Comparison of SEZ policies of China and India
 NEP - Industrialization through SEZ is a boon to the
Indian poor

Industrialization
With SEZs Without SEZs
• Development of supporting • Beaurocratic allocation
industries
• Planned utilization of resources of licenses
• Planned location of industries • Inefficient utilization of
• No requirement for separate
documentation resources
• Single window clearance
• Tax exemption during nascent
• Low employment
years generation
• Labour intensive laws for
employments
• Social development of the area
– compulsion for building
schools, houses, hospitals
 NEP - Industrialization through SEZ is a boon to the
Indian poor

Agricultural Land
• 51% of the land in India is cultivable.
• 90% of the land in West Bengal is cultivable.
• Improper utilization of resources.
• Rain fed agriculture.
• With current low levels of productivity Indian granaries are full of
food grains.
• Food grains imported from USA.
• Seasonal Unemployment.
• Growth in agriculture’s share in GDP is not as fast as GDP’s
growth.
• Company farming
• Consolidate small farms
 NEP - Industrialization through SEZ is a boon to the
Indian poor

• Out of the total agricultural land only 0.1% is

used by SEZ
• China’s Sez Shenzhen is spread over 34,000 Sq.
km.
• Total non agricultural land is 14,39,204 Sq. km.
• Do not sacrifice agriculture , and also don’t stick
to it.
• Employment to unorganized six sector which
amounts to 52%.
• In 1999 – 2000 agriculture accounted 60%
share in employment but 25.3% of GDP. Since
 NEP - Industrialization through SEZ is a boon to the
Indian poor

• SEZ initiative provides impetus to

and scope for planned growth of not
just business , but also living ,
learning ,healthcare and recreation
• For rural poor land is a lifelong asset.
• Iffco to set up first agriculture sez in
Andhra Pradesh.
 NEP - Industrialization through SEZ is a boon to the
Indian poor
Employment Generation through Sez
• Nokia and Flextronics electronics hardware Sez in Sriperumbudur

• Hyderabad Gems Sez for Jewellery.

• Apache SEZ being set up in Andhra Pradesh.

• Brandix Apparels, a Sri Lankan FDI project .

• In the services sector, 12.5 million sq meters space is expected in the IT/ITES
Sez 12.5 lakh jobs.
 NEP - Industrialization through SEZ is a boon to the
Indian poor

• Marpady Veerappa Moily – ARC

(Administrative Reforms
Commission )
• Land Acquisition Act 1854
• Rehabilitation and resettlement
policy
 NEP - Industrialization through SEZ is a boon to the
Indian poor

Conclusion
• Betterment of poor lies in a positive and very optimistic approach towards the development
of SEZs.
• Warding off misconceptions regarding SEZs
– Land acquisition
– Food security
– Employment
• Employment multiplier effect:
• Sub contracting of Businesses
• Skill enhancement of Indian farmer