216 Pages
English

Special Economic Zones in India

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The first book to examine India's Special Economic Zones and the different popular perceptions - both good and bad - surrounding this issue.


Special Economic Zones (SEZs) are turning out to be one of the stiffest challenges for India's economic policy reforms. Since the announcement of SEZ rules on 10 February 2006, these zones have aroused unprecedented controversy. The emotionally charged debate on SEZs has often produced inflexible positions on either side. The unusually strong public reaction has also forced policymakers to revisit several aspects of the policy in recent months.


Why are SEZs so controversial?  Will they really exacerbate income inequality, endanger food security and worsen regional imbalance? Or will they help Indian industry in taking its final leap onto the global arena? Only time will provide the answers. As the first book on India's SEZs, this volume examines different popular perceptions - both good and bad - surrounding these zones. Apart from the international evidence and the Indian story, the book looks closely at critical issues like financial viability, land requirements, extant rules and the political economy of SEZs. Admitting that the last word on the subject is far from being spoken, the book contends that the SEZ saga will be a test of strength for the country's social and political concensus on its economic policies and future reforms. Introduced by eminent economist Bibek Debroy, this book is a must read.


Preface; Foreword by Bibek Debroy; Why Economic Zones?; The New SEZs: Where, What and Why?; Are SEZs Financially Viable?; The Political Yatra; The Rules of the SEZ; The Land of SEZs; Not the Last Word; Appendices; Bibliography; Index

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Published 01 July 2008
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EAN13 9781843313496
Language English

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SPECIAL ECONOMIC ZONES IN INDIA
Anthem South Asian Studies
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SPECIAL ECONOMIC ZONES IN INDIA Myths and Realities
Amitendu Palit and Subhomoy Bhattacharjee
ANTHEM PRESS An imprint of Wimbledon Publishing Company www.anthempress.com
This edition first published in India 2008 by ANTHEM PRESS C49 Kalkaji, New Delhi 110019, India 7576 Blackfriars Road, London SE1 8HA, UK or PO Box 9779, London SW19 7ZG, UK 244 Madison Avenue #116, New York, NY 10016, USA
© 2008 Amitendu Palit and Subhomoy Bhattacharjee
The views expressed in the book are entirely personal to the authors and do not reflect those of their organizations
The moral right of the authors has been asserted
All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the above publisher of this book.
1 3 5 7 9 10 8 6 4 2 ISBN13: 978 81 905835 3 4
Printed at Sanat Printers, Sonepat, Haryana
CONTENTS
Acronyms and Abbreviations List of Tables, Boxes, Figures and Annexures Preface Foreword by Bibek Debroy
CHAPTER 1 Why Economic Zones?
CHAPTER 2 The New SEZs: Where, What and Why?
CHAPTER 3 Are SEZs Financially Viable?
CHAPTER 4 The Political Yatra
CHAPTER 5 The Rules of the SEZ
CHAPTER 6 The Land of SEZs
CHAPTER 7 Not the Last Word
APPENDIX 1 APPENDIX 2 APPENDIX 3 APPENDIX 4 APPENDIX 5
Bibliography
Index
vi ix xi xv
1
36
62
84
113
147
169
185 187 188 191 192
193
196
ACRONYMS AND ABBREVIATIONS
A&N AD APIIDC
BALCO BDO BMP BoA BOO BOOT BTP CBDT CBEC CST DC DGFT DIPP DTA EDZ EEFC EEZ EHTP EOU EPCG EPW EPZ ETDZ FDI FEMA FEZ FICCI FOB FRBM FTP FTWZ FTZ FZ
Andaman and Nicobar Authorized Dealers Andhra Pradesh Industrial Infrastructure Development Corporation Bharat Aluminium Company Ltd Block Development Officer Bangalore Mahanagar Palike Board of Approval BuildOwnOperate BuildOwnOperateTransfer Biotechnology Park Central Board of Direct Taxes Central Board of Excise and Customs Central Sales Tax Development Commissioner Director General of Foreign Trade Department of Industrial Policy and Promotion Domestic Tariff Area Economic Development Zone Export Earners’ Foreign Currency Exclusive Economic Zone Electronic Hardware Technology Park Exportoriented Units Export Promotion for Capital Goods Economic and Political Weekly Export Processing Zone Economic and Technological Development Zone Foreign Direct Investment Foreign Exchange Management Act Free Economic Zone Federation of Indian Chamber of Commerce and Industry FreeonBoard Fiscal Responsibility and Budget Management Foreign Trade Policy Free Trade Warehousing Zone Free Trade Zone Free Zone
Special Economic Zones
GPPIL GVMC ICRIER
ICT IDA IIM IISCO IPZ IT ITES ITP ITZ IZ JV LoA MAT MIDC MoU NAC NALCO NCR NEIP NIPFP NMSEZ NNP NPA NREGA NTPC OBU OIIDCO PCPIR PGCIL POSCO PSU PwC PWD QIZ R&R RIL
vii
Gujarat Positra Port Infrastructure Ltd Greater Visakha Municipal Corporation Indian Council for Research on International Economic Relations Information and Computer Technologies Industrial Disputes Act Indian Institute of Management Indian Iron and Steel Company Industrial Processing Zone Information Technology ITenabled Services Industrial and Technology Park International Trade Zone Industrial Zone Joint Venture Letter of Approval Minimum Alternate Tax Maharashtra Industrial Development Corporation Memorandum of Understanding NonAgricultural use Clearance National Aluminium Company Ltd National Capital Region North Eastern Industrial Policy National Institute of Public Finance and Policy Navi Mumbai Special Economic Zone Net National Product NonPerforming Assets National Rural Employment Guarantee Act National Thermal Power Corporation Offshore Banking Unit Orissa Industrial Infrastructure Development Corporation Petrochemical and Petroleum Industrial Regions Power Grid Corporation of India Limited Pohang Steel Company Public Sector Undertaking PricewaterhouseCoopers Public Works Department Qualifying Industrial Zone Rehabilitation and Resettlement Reliance Industries Limited
viii
RoK SEEPZ SEZ SIA STP STPI STT TDR TDZ UPA UT VRS WBIDC WTO
Special Economic Zones
Republic of Korea Santa Cruz Electronics Export Processing Zone Special Economic Zone Social Impact Assessment Software Technology Park Software Technology Parks of India Securities Transaction Tax Transfer of Developmental Rights Trade Development Zone United Progressive Alliance Union Territory Voluntary Retirement Scheme West Bengal Industrial Development Corporation World Trade Organization
LIST OF TABLES
Table 1.1: Types of zones Table 1.2: Regional distribution of zones Table 1.3: Exports from India’s SEZs Table 1.4: Employment and investment in India’s SEZs Table 2.1: Shares of states/UTs in total SEZ approvals Table 2.2: Regional shares in SEZ approvals Table 2.3: Industrywise share of SEZs Table 2.4: Statewise distribution of SEZs (in no.) according to land size Table 2.5: Statewise distribution of SEZs being developed by leading real estate firms Table 3.1: Lending to sensitive sectors by scheduled (Rs billion) commercial banks Table 5.1: Authorized Operations in SEZs Table 5.2: Land rules for Different SEZs Table 6.1: Comparative chart of the new towns developed after Independence and the largest SEZs
Box 1.1: Box 2.1: Box 2.2: Box 2.3: Box 3.1: Box 3.2: Box 4.1: Box 4.2: Box 4.3:
Box 4.4: Box 5.1: Box 5.2: Box 6.1: Box 6.2: Box 6.3:
LIST OF BOXES
The Chinese story Are SEZs aggravating regional disparities? Are SEZs encouraging IT units to relocate? Why are real estate companies interested in SEZs? Check list for financial planning in an SEZ Employment snapshots Positra SEZ Benefits for M&A The Cold War between the Commerce and the Finance Ministry Nandigram, 20 March 2007 The Board of Approvals SEZs and EOUs: Any Difference? Gold Rush Setting a fair market value for land TDR
4 11 20 22 37 41 46
50
55
72 120 123
151
17 39 48 56 66 77 85 87
92 101 119 129 147 157 161
x
Figure 2.1: Figure 2.2:
Figure 2.3: Figure 2.4:
Special Economic Zones
LIST OF FIGURES
Regional shares in SEZ approvals Statewise distribution of SEZ districts and nonSEZ districts Statewise land area for SEZs Relative comparison of land area ranks for top 10 SEZ states
Annexure 1.1: Annexure 1.2: Annexure 1.3: Annexure 2.1:
Annexure 5.1:
Annexure 5.2:
LIST OF ANNEXURES
Zone Employment in Different Countries Regional Distribution and Employment in Zones Projected exports for notified SEZs for 2007–8 Minimum area for sectorspecific SEZs in different states Application for setting up of Special Economic Zone Application for setting up a unit in a Special Economic Zone
41
43 52
53
24 28 29
58
133
137