special economic zones under fire
TRANSCRIPT
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SPECIAL ECONOMIC
ZONES UNDER FIRE
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CASE DETAILSO The concept of free zone - Export Processing
Zone (EPZ) -emerged during the 1960s
O
The basic objectives of these zones were topromote exports and employmentopportunities
O Various concessions offered by the
Government
O A conscious attempt on the part of policymakers to replicate such models in manyregions, especially in countries such as China.
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CASE DETAILSO SEZs in China vs India
O
Key concerns in Indias SEZ policy.
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State/Union TerritoryNumber of operational Special Economic
Zones (June 2012)Number of SEZs formally
approved (June 2012)
Andra Pradesh 36 116
Tamil Nadu 28 77
Karnataka 20 62
Maharastra 18 119
Gujarat 13 53
Kerala 7 29
Uttar Pradesh 6 35
West Bengal 5 24
Rajasthan 4 11
Haryana 3 49Chandigarh 1 2
Madhya Pradesh 1 17
Odisha 1 10
Punjab 0 8
Goa 0 7
Chhattisgarh 0 3
Delhi 0 3
Dadra and Nagar Haveli 0 2
Nagaland 0 2
Puducherry 0 2
Uttarakhand 0 2
Jharkhand 0 1
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Evaluate critically the salientfeatures of Indias SEZ policy.
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O Location and size of SEZs
O Displacement , Compensation &
Rehabilitation
O Land acquisition & Impact on communities
O Goods and Service Tax
O Lack of coordination
O Shifting of existing manufacturing units to
SEZs
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Key differences in the
approach to develop SEZs inIndia vis--vis China
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India China
IntroductionScheme on SEZ was introduced
in 2000
First SEZ was set up in
1980 with an eye on luring
dollars back into China
Size
Largest SEZ being developed by
Relience at Navi Mumbai is only
5000 hectares
Chinas largest SEZ is the
one at Shenzhen which is
49,300 hectares
InvestorsCan be set up by the public,
private or joint sectors
Developed mostly by the
government
LocationSEZs in India are across the
length and breadth
SEZs are strategically
located; mostly on the
coastal areas
Tax incentives Incentives are offered to all SEZsIncentives depend on
various conditions
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SEZs are likely to cause moreharm to India rather than
benefit the society as a whole-Discuss
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Positive ImpactO Employment generation
O Contribution to respective States GDP
O Creation of world class self containedinfrastructure
O Increase in States revenues from VAT(Value added tax), Property taxes, StampDuty etc
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Negative ImpactO Shrinking Agricultural Area
O Inadequate compensation to farmers
O Decrease in crop production- leading to water andfood crisis
O A substantial loss of revenue- with manufacturingand service moving to these tax free havens
O Fertile lands being used for establishing industrialunits
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ConclusionO SEZ can become a dangerous tool
O A well defined strategy required for SEZsto be successful
O Rehabilitation and resettlement schemes
must be formulated so that the process ofindustrialization is not hampered
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Explore the SEZ strategy usedby any four developingcountries and carry out acritical evaluation.Suggest a strategy for your own
country to promote exportproduction.
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BANGLADESHO There are currently eight zones. Businesses
from 32 countries have so far invested in theexisting zones.
O The primary objective is to provide specialareas where potential investors would find acongenial investment climate, and locationfree from cumbersome procedures.
O In 2010, FDi magazine ranked ChittagongEPZ as one of best competitive specialeconomic zones in the world.
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PHILLIPINESO As of 31 May 2010, there were more
than 200 Ecozones in the Philippines
O Business establishments operatingwithin Ecozones from all taxes
O Business establishments are only
required to pay five percent (5%) of their
gross income to the nationalgovernment.
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O Activities Eligible for PEZA Registration
and Incentives include but are not limitedto
(1) Export Manufacturing;
(2) Information Technology Service
Export;(3) Tourism;
(4) Medical Tourism;
(5) Agro-industrial Export
Manufacturing;(6) Agro-industrial Bio-FuelManufacturing;
(7) Logistics and WarehousingServices
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RUSSIAO Russian legislation outlines four types of
special economic zones:
Industrial and development zones
Technological implementationzones
Tourist and recreational zones
Port zones.
O Russia has two industrial and developmentzones, four technological implementationzones ,seven tourist and recreational zonesand three port SEZs
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JAMAICAO Designed to encourage foreign investment
and international trade
O Businesses operating within these zoneshave no tax on their profits, and areexempted from customs duties on importsand exports (capital goods, raw materials,construction materials, and officeequipment) and import licensing
requirements.O Companies outside of the zones can apply
for free zone status as Single Entity FreeZones
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Strategy For India
O Expansions of the Port SEZ
O
Increased investment in Medical TourismSEZ
O Proper implementation of the SEZ policy
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