Industrial policies (special

economic zones)

JAGDISH SINGH-25
KAPIL SHARMA-28
SANJAY ROUTELA-42
TRISHA SHISODIA-57
MAYANK SUTHAR-31
An overview
 SEZ denote geographical areas enjoy special
privileges as compared to non-SEZ areas
 To boost exports by attracting both Indian and
foreign corporate to undertake investment in these
areas
 EPZ located at Kandla and Surat, Santa Cruz
Mumbai, Falta (West Bengal), Chennai,
Vishakhapatnam and Noida has been converted
into SEZ
SEZ – A favoured destination

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Integrated Infrastructure
Self-contained &
Self-managed

India provides boldest policy framework in 55

Objectives
 Main argument is to promote exports by concentrating resources in some
pockets

 Policy was introduced in april 2000 to provide internationally competitive and

hassle free environment for exports

 Units to be set up to manufacture goods or render services

 Unit in SEZ has to be a net foreign exchange earner

 No condition to export specified proportion of output

 Can be set up in public sector, private or joint sector or even by state govts in
collaboration with any corporate
Initial Special privileges
 Several fiscal and regulatory incentives are offered to
developers of SEZ as well as to the units within
 No income tax on corporations profits for first 5 years
and only 50% of the tax for two years thereafter
 This exemption can be extended for another 3 years if
half of the profit is reinvested in the corporation
 Customs duty, excise duty, service tax, VAT, dividend
tax etc exempted
Initial Special privileges(contd.)
 Imports exempted from any custom duties
 Raw materials such as cement to steel to electrical parts
exempted from any tax/duty
 Government can acquire vast tracks of land and provide
to developers
 25% of the area must be used for export related activities
and the remaining i.e. 75% can be used for economic and
social infrastructure but benefits are availed for whole
area
Initial Special privileges(contd.)

 Exempted from the application of labour laws so

that they can attract entrepreneurs
 Means labour commission cannot inspect SEZs,
even to implement safety and environment norms
 Declared public utility services
 Not comply with the provisions of industrial
disputes act,1947
Present state and future programmes

 At present, india has 15 SEZs, each with an

average size of 200 acres
 Govt has approved total of 164 SEZs
 During 2004-05, the total exports from SEZs were
Rs 17729 crores which is 4% of the country’s
total exports(Rs.361879 crores)
Recent developments

 Due to Clashes in nandigram and singur issue of

developing a new SEZ policy was referred to
central government
 Laid down two conditions
 First, the government has prescribed a ceiling of
5000 hectare for any SEZ proposal
 Second, minimum of 50% land set as minimum
processing area
objectives laid down while passing the
SEZ act in May 2005

 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
SEZ act, 2005

 To instill confidence in investors and signal

government’s commitment to a stable SEZ
policy
 Passed by parliament in may 2005
 Received presidential assent on 23rd june
2005
 Implemented w.e.f feb 10, 2006
Salient features of SEZ act

 Exemptions from customs duty, excise duty etc.

on import/domestic procurement of goods
 100% income tax exemption for 5 years, 50% for
the next 5 years and 50% of ploughed back export
profits for 5 years thereafter
 Exemption from dividend distribution tax
 Exemption from minimum alternate tax
Salient features of SEZ act(contd.)
 Constitution of an authority for each SEZ to provide
administrative, financial and functional autonomy to these
zones
 Establishment of courts and a single enforcement agency
to ensure speedy trial and investigation of offences
 Encouragement to state govts to liberalise state laws and
delegate their powers to the development commissioners
to the SEZs to facilitate single window clearance
SEZs performance
year Export value(in Growth rate(over
crore Rs) previous year)
2004-05 18314 32%

2005-06 22840 24.7%

2006-07 34615 52%

2007-08 66638 92%

Investment and employment prior to the
SEZ Act, 2005:
 there were 1143 units
 provided employment to over 1.97 lakh
persons,about 37% of whom were women
 Private investment by entrepreneurs was of the
order of over Rs. 5626.24 crore.
Investment and employment under the
SEZ Act 2005:

 Investment: Rs. 83450crore

 Employment: 1,13,426 persons
Parliamentary standing committee report
on SEZ
 Committee consisted of 31members
 Submitted report in june 2007
 Had Representatives from congress, RJD, CPI-M,
CPI, TMC, SP, BJP and from corporate houses
like infosys, wipro, reliance and some NGOs
 Chaired by BJP leader murli manohar joshi
 Reconciled the views of divergent groups
Findings and recommendations of the
standing committee
 Ban on the use of irrigated double crop or multi-crop land
 Waste and barren lands should be used
 Use only single crop, rain fed land, 20% of the total in case of
multi, 40% in others
 Permission from state government before purchasing
 Ministry of agriculture must be on board of approval of SEZ.
Findings and recommendations (contd.)

 Land locked in closed industrial units should be

used, 1254 private sector units, 31 central
PSUs, 41 state PSUs
 Maximum area should be limited
 Mad rush of IT sector should be checked
 Cap on SEZs region-wise
 Need for replacement of land acquisition
act,1894
Major foreign investors
 Nokia SEZ in Tamil Nadu
 Quark City SEZ in Chandigarh
 Flextronics SEZ in Tamil Nadu
 Mahindra World City in Tamil Nadu
 Motorola, DELL and Foxconn
 Apache SEZ (Adidas Group) in Andhra Pradesh
 Divvy's Laboratories, Andhra Pradesh
 Rajiv Gandhi Technology Park, Chandigarh
 ETL Infrastructure IT SEZ, Chennai
 Hyderabad Gems Limited, Hyderabad
Chennai SEZ
 MEPZ Special Economic Zone was established in 1984
 converted into a Special Economic Zone on 1.1.2003
 objective of the SEZ is to facilitate exports through
reduction of transaction costs.
 To this effect, the Ministry of Commerce and Industries
has introduced special features that include Offshore
Banking Units and Container Freight Stations to be set up
within the Zone, besides liberalised Customs procedures
Chennai SEZ(contd.)
 the cost, time and effort saved would translate to higher
exports from the Zone.
 MEPZ SEZ is a multi-product Zone housing 117
functional units
 Another 27 units are under various stages
of implementation
 The export turnover for the year 2006-2007 was Rs.2462
crores.
 Garments, software and engineering products contributed
more than 50% of export value
Chennai SEZ(contd.)
 Recent growth has been in engineering sector with
special reference to automobile ancillaries.
 the Zone is under the administrative control of the
Ministry of Commerce and Industries and caters to the
needs of both units in the Special Economic Zone as
well as of 100% EOUs located in Tamil Nadu,
Pondicherry and Andaman & Nicobar islands
 The Zone is headed by Development Commissioner.
MahaMumbai Special
Economic Zone
[MMSEZ]
“MMSEZ is an ideally integrated SEZ with the best of business,
living, learning and recreation facilities”
 A World Class
Infrastructure
“which is environment friendly, hassle free, competitive,
self regulated with availability of affordable, skilled &
educated manpower provided with superior living
conditions”
MMSEZ
PROJECTS:

Pipavav Port Modern Shipyard LNG Project

Toll Road Pipavav Railway Special Economic Zone

MahaMumbai SEZ– Location
MAHA MUMBAI SEZ

Mumbai

Navi Mumbai

Jawaharlal Nehru Port

MUMBAI Proposed 2nd Intl. Airport

Mumbai Port

MMSEZ Green Zone

Rest off Mainland

 MMSEZ – Highlights
• Located in the prosperous & industrious
state of Maharashtra
• Development of MMSEZ will be in three
phases
• First phase will comprise of 2,500 hectares,
to be completed within 4 years

• Subsequent phases include development of 10, 000 hectares

• The proposed development of Trans Harbour Link will reduce the travel time
to 20 mins from downtown Mumbai

• Planned investments of US$ 1 billion in 4 years for the first phase

development
India’s new economic hub in the making
 Infrastructure Plan – Phase I
 Well Planned Integrated infrastructure format
 Sector specific industrial Parks Area in
 Commercial Business Districts Infrastructure Hectares %

 Service Zones Industrial 870 34.80

 World Class Roads Residential 488 19.55
Commercial 66 2.65
 In-zone jetty Institutional 146 5.90
 Waste management systems Sports & Recreational 127 5.10
Parks & Open Spaces 66 2.60
 Disaster management systems Port 100 4.00
Railway & Warehouse 81 3.20
 Linkages to other developments
Utilities 100 4.00
 Proximity to already existing JNPT terminalGreen Buffer 181 7.20
Major Roads 275 11.00
 Proposed International Airport in vicinity
 Connectivity with existing rail linkages for Total 2500 100.00

cargo & passenger traffic

 MMSEZ - Integrated

Infrastructure
World-class private initiated integrated infrastructure at globally competitive
prices, under one umbrella
 Efficient and reliable supply of utilities
 Uninterrupted Power
 Quality water supply
 Efficient Waste Management

 Multi-modal connectivity
 Network of internal roads connecting to the existing highways
 Provide rail linkage to the existing Indian rail network
 Adjacent to the modern and state-of-the-art port at JNPT
 Close to the proposed new international airport at Navi Mumbai and existing airport at Mumbai
 MMSEZ – Integrated
Infrastructure (Contd.)
 Institutional / Recreational
 Provision of primary & secondary schools & colleges
 Primary health-care centres, specialty & general hospitals & polyclinics

 Leisure
 Sports, clubs & other recreational facilities within zone
 Regional & town parks and gardens religious centers etc.
 Hotels, resorts, conventions & exhibition centres, etc.
 Golf course, theatres / multiplexes, etc.
 MMSEZ – Integrated
Infrastructure (Contd.)
 Industrial
 Developed plots for industrial establishments
 Integrated Industry specific parks for textiles,
electronics, gems & jewellery etc.
 Standard design factories and pre-installed utilities
 Commercial
 Central Business District (CBD), Town Centers (TC) &
Coastal Resort Centers (CRC)
 Fully integrated with IT infrastructure
 Residential
 Planned on a self-contained neighborhood concept with
educational institutions, shopping & recreational facilities
 Coastal Residential, Central Area & Inland townships with
green open spaces and facilities
thanks