shortcomings of an sez
TRANSCRIPT
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6 April 2012 SEZ 1
SEZ - Benefits/ Shortcomings
[Benefits/shortcomings for organizations to be in SEZ and why organizations
want to get out of SEZ (Surat Apparel Park SEZ and Dahej SEZ)]
Prepared by: MIRA J ANAJWALA
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Flow of the Presentation:
SEZ- Overview
Project details-objective, scope
Project details-methodology followed
Analysis/study
Conclusion/Interpretation from Analysis
SuggestionsLearnings & Limitations of Project
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Objectives behind setting up of SEZ:
The main objectives behind setting up of an SEZ policy were
given as under:
Generation of additional economic activity
Promotion of Exports of goods and services
Promotion of investment from domestic and foreign sources
Creating of Employment opportunities
Development of infrastructure facilities
The policy intended to make these SEZs an enginegrowth supported by quality infrastructurecomplemented by an attractive fiscal package withminimum possible regulation
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SEZ Rules Provision:
The SEZ Rules provided for:
Simplified procedures for development, operation, and maintainance of
the Special Economic Zones and for setting up units and conducting
business in SEZs,
Single Window Clearance for setting up of an SEZ,
Single Window Clearance for setting up of a unit in an SEZ,
Single Window Clearance on matters relating to Central as well as State
governments;
Simplified compliance procedures and documentation with an emphasis
on self certification
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Moon Sez Consultants Pvt. Ltd. SEZ-Cenvat and Customs 6
Fiscal Benefits available to SEZ
Cenvat
CustomsVAT
Income Tax
Service Tax
Central Sales tax
Securities
Transaction Tax
Exemptions of
tax ,duties or
cess in 21
Acts
Stamp Duty
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Benefits
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Critical issues of SEZs:
Land Acquisition
Internal Competitiveness of exports
Attracting FDI
Infrastructure Development
Employment
Misuse of land for real estate
Loss of Revenue
Relocation of industries
Employment
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Research Methodology
OUR ACTIVITIES:
Being aware about various activities of GIDC during the Orientation Programme
Prepared Analytical reports based on Survey carried out in Surat Apparel Park SEZ
and Dahej SEZ and making a Comparative analysis to identify the factors
responsible for success or failure of an SEZ, recommend GIDC
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Objective
Literature Study
Data Collection
Data Analysis
Recommendations
and Conclusion
SEZ Theory Government Policy
Primary Data
Collection by way of
Questionnaire method,
Observation
Secondary Data Collection
from various Reports and
other materials
To identify reasons why organizations want to be n SEZ or why
the organizations want to move out of SEZ, SAP SEZ and Dahej
SEZ with respect to the benefits/ shortcomings for an
organization in SEZ
Methodology
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Developed
97 plots
Sold 43 plots
(44%)
Invested
fully/
partially
20 units-47%
8 functional
units at present
(19%)
3 units closed
down recently
1 unit
upcoming/
planning to
start
operation
With the objective ofpromoting the garment/ apparel/ made ups
industry in Gujarat,To utilize local man made fabrics of Surat
and supply it to the big markets and cities in
IndiaAnd also to develop & promote Apparel
exports from Surat
But later on in 2005-06
Surat ApparelPark wasconverted in toapparel Park-SPECIALECONOMICZONES (SAP-
SEZ)
, which changed the direction of
original concept ofApparel Park
Current Status of the Surat Apparel Park- SEZ:Surat Apparel Park was established in 2003-04
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Analysis done from the survey carriedout at SAP SEZ
Type of
Company
Public Privat
e
Othe
r
Number of units
under each type
of company
2 5 1
Size of unit Large Mediu
m
Smal
l
Number of units
under each type
2 2 4
The Company isfrom
India Abroad
Number of units
under each type
of company
7 1
5
21
Public Ltd. Co
Private Ltd. Co
Other
From
India
87%
From
Abroad
13%
AnalysisGeneral Information of the units operating in Surat Apparel park SEZ:-
Sample Size 100%, (surveyed all the Currentlyoperating units in SAP- SEZ)
2 2
4
00.5
11.5
22.5
33.5
44.5
Large
Mediu
mSm
all
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Analysis: SEZs V/S DTA
SR.
No.
Year Drawback
1. 2004 6.80%
2. 2005 6.20%
3. 2006 7%
4. 2007 12%
5. 2008 9%
6. 2009 8%
Accessibility
for Labours /
Suppliers
/Visitors/Guest
s
Highly
Restricted
Open & Free
Movement
In case of SEZ, non-
beneficial for
business & causing
hindrances
DTA
REJECTS &
WASTAGES
HIGHLY
RESTRICTED
LO0SS
MAKING
OPEN & FREE
REVENUE
GENERATING
Procedure to sell off/
dispose off the
rejects & wastages is
impractical
Most of the units
have tons & tons of
wastage lying in their
compounds
DTA
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Quality of Physical and Social Infrastructure at SAP SEZ:
4
3
2
3
4
2
1
2
1
2
0% 20% 40% 60% 80% 100%
water
Electricity
Transportation
very good
good
Average
bad
very bad
16%9%
16%
18%6%
6%
16%
13%
Housing facilty
Clinic
School/colege
Shopping facilty
Multiplaex/recreational
faciltyRestaurant/ canteen
Banking facility
ATM
Post office
STD/ISD
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Suggestions
Observations made from surveying the units at SAP-SEZ:-
Recommendations:
The concept of Special Economic Zone is to bring large dividends to the State in terms of
economic and industrial development and the generation of new employment opportunities.
But as the units are facing the problem of labor. The concept of an SEZ is not working for theSurat Apparel park SEZ. So Government of Gujarat should look into this matter seriously.
The other objective of an SEZ is to attract the Industrialists and entrepreneur to establish
industrial units in the Zone, and for that the State Government has proposed to grant the
various fiscal benefits, But many industrialists who have invested in SAP-SEZ plots, are not
ready to start operation, some of the functioning units have even closed down their units,and there are hardly 10% of total capacity operating in Surat Apparel park SEZ. So this way
also we can say that GIDC has failed to achieve this objective.
The working condition of the units operating in SAP- SEZ is far better as compared to the
units operating in DTAs. Because of the norms that units have to follow the norms related to
labor. So thats a positive sign of SAP-SEZ.
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Survey carried out at Dahej SEZ
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Findings and Suggestions for Dahej SEZ from the Survey
carried out at Dahej SEZ:
Reason behind the success of Dahej SEZ are
The Strategic location and the Connectivity at Dahej SEZ
Speed of infrastructure is growing at a rapid pace mainly because of the
attitude of Government of Gujarat (Business friendly Environment)
About Infrastructural issues:
Gas facility, (GSPL to set up a gas distribution network)
Waste Disposal facility required to dispose off the solid waste
Additional Water Storage facility
DSL should Continue providing such world class infrastructure facility and
also continue with good governance.
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Conclusion/Interpretation from Analysis
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Learning:
Basic knowledge of SEZ,
Experience of Survey carried out for an organization was actually a great learning
experience
(You have to act responsibly when you are representing on behalf of an
organization)
Difficult thing takes long time and Impossible things a little long
How and from where to correct required data, and how to utilize that data
Limitations: The scope of the study is restricted to two SEZs
The limitations of the data collected from primary as well as secondary sources
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