Final sez


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Final sez

  3. 3. SPECIAL ECONOMIC ZONE• Geographical region that economic and other laws are free market oriented• Nation wide rules suspended inside SEZ• Main goal is increase in FDI and GDP
  4. 4. It covers a broad range of specific zones such as:• Free Trade Zone(FTZ)• Economic Processing Zones(EPZ)• Industrial Parks• Free Ports
  5. 5. SALIENT FEATURES OF SEZ• Self certification for export and import  Import and export movements of goods are based on self declaration  No routine examination is made unless specific order from Development Commissioner or authority.• Sub contracting  A SEZ unit may sub contract a part of it’s product or production process to different units, even in abroad
  6. 6. • Fiscal incentives-Tax  Exemption from excise and customers duty on procurement of capital assets, consumable stores, raw-materials from domestic market  Exemption from sales tax, import duty, Income tax, minimum alternative tax and dividend distribution tax• Single Window Clearance  Submit regularity documents at single locations  Less proceedings and save time
  7. 7. • Sales in DTA permitted  Domestic Tariff Are  Are within India and outside SEZ  Goods,rejects,remnants etc arising during manufacturing can be sold on DTA Duties applicable
  8. 8. • Minimum area Multi product 1000hectors 35% Multi product(services) 100 hectors 35% Port and airport 10 hectors 50% Electricity, hardware and software including ITES 10 hectors 50%• Eligible activities  Manufacturing, trading and service activities
  9. 9. HISTORY OF SEZ IN INDIA• EPZ at Kandla in 1965• Performance of EPZ fell short due to lack of good economic policies• Economic reforms in early 1990’s• Modern day SEZ came into existence• SEZ policy• Results were not desired and manufacturing sector witnessed a sudden drop in over all growth• In 1990’s FDI’s deteriorated• Immature Indian markets• Lack of investor friendly environment• Present day SEZ policies
  10. 10. SOME OF IMPORTANT SEZ IN INDIA INDIA• Karnataka Biotechnology and Information Technology Services - SEZ on biotechnology sector in Bangalores Electronics City, over an area of 43 acres• Shree Renuka Sugars Limited - SEZ on sugarcane processing complex covering 100 hectares, comprising a sugar plant, power station and distillery, at Burlatti in Belgaum district
  11. 11. •Ittina Properties Private Limited and three other - SEZs in IT sector, covering electronics, hardware and software sectors in Bangalore, over an area of 15.732 hectares• Wipro Infotech - SEZ on IT / ITES at Electronics City, Sarajpur Bangalore• Hewlett Packard India Software Operation Pvt. Ltd. - SEZ on IT
  12. 12. • Food processing and related SEZ services in Hassan, over an area of 157.91 hectares• SEZs on pharmaceuticals, biotechnology and chemical sectors in Hassan, covering of 281.21 hectares• SEEPZ - Andheri (East), Mumbai• Khopata - Multi-product, Mumbai• Navi Mumbai - Multi-product, Mumbai• Salt Lake Electronic City, West Bengal• Manikanchan - Jems and jewelery, West Bengal• Calcutta Leather Complex, West Bengal• Falta food processing unit, West Bengal
  14. 14. OBJECTIVES OF SEZ ACT• 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
  15. 15. ROLE OF SEZ IN INDIAN ECONOMY• To provide internationally competitive environment• To encourage FDI and enhance GDP• To increase share in global exports SEZ exports accounting for 26% of India’s total export in 2011. 15
  16. 16. EXPORTS FROM SEZ250002000015000 Rs in Crores10000 5000 0 2003-04 2004-05 2006-07 16
  17. 17. MAJOR ISSUES• Land Acquisition• Role of State Govt. in Land Acquisition• Compensation Packages to land owners• Rehabilitation packages for displaced farmers• State Govt.’s commitment to create infrastructure• Time frame for operationalisation• Control over SEZs
  18. 18. ADVANTAGES OF SEZ• Growth and development• Attracts Foreign Direct Investment• Exposure to technology and global market• Increasing GDP and Economic Model• Employment opportunities are created
  19. 19. DISADVANTAGES OF SEZ• Land acquistion at very low prices• Farmers loose their livelihood• Tax holidays affect GDP
  20. 20. ADMINISTRATIVE SETUP FOR SEZ• Board of approval- apex body in department• Each zone is headed by development commissioner who is also heading approval committee• Approval committee at the zonal level dealing with approval of units in SEZ and other related issues
  21. 21. BOARD OF APPROVAL• Duty to promote and ensure orderly development of SEZ• Chairperson of board-special secretary to government of India in ministry of commerce and industry, dept of commerce consists of 18 members and nominee of each state govt.
  22. 22. MAJOR FUNCTIONS OF THE BOARD• Granting approval or rejecting proposal or modifying the approvals for establishment of SEZ• Granting approval of authorised operations by the developer in the SEZ• Granting approval to the developers or units for foreign collaborations and FDI in SEZ for its development ,operations and maintenance• Granting approval or rejecting of proposal for providing infrastructure facilities in SEZ
  23. 23. DEVELOPMENT COMMISSIONER• Central government may appoint any of its officers not below the rank of Deputy Secretary to government of India as the development commissioner of one or more special economic zone• Every development commissioner shall take all steps in order to discharge his function to insure speedy development of SEZ and promotion of exports
  24. 24. MAJOR FUNCTIONS OF DEVELOPMENT COMMISSIONER• Guide the entrepreneurs for setting up of units in SEZ• Ensure and take suitable steps for effective promotion of exports for SEZ• Ensure proper coordination with central government or State Government departments concerned• Monitor the performance of the developer and units in a SEZ
  25. 25. APPROVAL COMMITTE• Every SEZ has one approval committee• 9 members• Chairperson- Development commissioner
  26. 26. MAJOR FUNCTIONS OF APPROVAL COMMITTE• Approve the import or procurement of goods from the Domestic Traffic Area, in the SEZ for carrying on the authorised operations by the developer• Approve of services by a service provider, from outside or from the D.T.A• Monitor the utilisation of goods and services or warehousing of trading in SEZ• Approve, modify or reject proposals for setting up units for manufacturing or rendering services or warehousing trading in the SEZ
  27. 27. SWOT ANALYSIS OF INDIAN SEZ STRENGTH• Based on Western model or SEZ in China• An established legal redress system• Relatively low labour costs• Employment opportunities• India’s large English speaking and skilled workforce• Exposure to technology and global market
  28. 28. • Worldwide acceptance of capabilities in fields like • Pharmaceutical manufacturing & research • Clinical trials • Manufacturing auto parts • Engineering designing & consultancy, IT & ITES • Malls and hotels • Hospital• Financial & other institutional Networks like Insurance Companies
  29. 29.  WEAKNESS• Poor infrastructure and transport facilities• High cost of capital• Inadequate institutional support• Political changes• Inappropriate locations
  30. 30.  OPPORTUNITIES• An alternative manufacturing base, particularly compared to Chinese SEZs• Investments in core strength areas like IT and software products and services.• New small ports & airports are also being developed keeping SEZ concept in mind• A large NRI base who have traditionally invested less in Greenfield development in India
  31. 31.  THREATS• The pattern of buying & selling may not continue. With relocations of industries in other third world countries, new competitors will emerge• opposing interests• Prospect of even more restrictive labour laws being introduced• Increasing rejection rate for proposals to establish SEZs
  32. 32. CONCLUSION• scope of human capital formation and technology upgrading • effects will widen.• Government to play a pro active role in strengthening these effects.• linkages between the domestic economy and Special Economic Zones.• Effects of Special Economic Zones are contingent upon the success of these zones in attracting Foreign Direct Investment.
  33. 33. THANK YOU…