The document discusses the analysis of economic growth from Special Economic Zones (SEZs) in India. It begins with defining SEZs and providing background on their establishment in India. The objectives of SEZs as per the 2000 policy are outlined as generating economic activity, promoting exports, stimulating investment, and creating employment opportunities. Statistical data on the number of approved and operational SEZs in India is also presented. The document then reviews literature on SEZ performance assessment indicators and identifies a research gap in developing a tool to continually monitor SEZ performance. It aims to use this tool to evaluate 7 major public sector SEZs in India based on exports, investment, and employment over 10 years to determine the best performer and provide

1. BITHIKAA BISHESH
RESEARCH SCHOLAR, SHARDA UNIVERSITY, GREATER
NOIDA
&
SUPERVISOR: DR.
ASSISTANT PROFESSOR SHARDA UNIVERSITY, GREATER
NOIDA
Analysis of Economic growth
from Special Economic Zones

2. INTRODUCTION
Defining SEZ:
Specific Geographical regions
Fenced-in Industrial Estate
SEZs in India:
Pioneer in Asia- Kandla SEZ in 1965.
SEZ policy (2000): EPZ coverted to- SEZs

3. SEZ OBJECTIVES (SEZ policy, 2000)
1. Generation of additional economic activity
2. Promotion of exports of goods & Services
3. Stimulate investment
4. Generate employment opportunities
5. Development of Infrastructure facilities

4. SEZ act(2005) & SEZ Rules (2006)
As per SEZ India data (2.09.2016)
No. of Approved SEZs (Formal) = 405
No. of Approved SEZs (In-principle) = 31
Total No. of notified SEZs = 352
Total No. of Operational SEZs = 196
Central government= 7
State Govt/Private Sector SEZs set up prior to the
SEZ Act 0f 2005= 11
SEZs notified under the SEZ Act of 2005 = 186

5. LITERATURE REVIEW- 1
Little research on SEZ performance in India during
the period 2000-2010 (Aggarwal, 2004).
There is exhaustive literature analyzing the efficacy
of SEZ . Grandos (2003) pointed out that growth
models based on export promotion instead of import
substitution are better models.
Success factors for SEZ have been researched by
several authors. CII report(2008), Smart&
Hsu(2004), and Cling & Letilly (2001) have argued
that Geographical location is the most important
factor behind SEZ success in India and China.

6. LITERATURE REVIEW- 2
Kumar (1989), and Wei Gi (1999) have found that
Economic infrastructure and favourable govt. policy are
critical for SEZ success in S. Asia, India and China.
Kumar (1998)
The existing literature has mainly judged the success of
SEZs/EPZs in terms of employment generation, export
growth, linkages to the host economy, foreign exchange
GDP growth and regional imbalances in growth.
Efficiency of SEZs in India is far below the threshold level
(Tantri, 2011).
No tool for growth measurement

7. RESEARCH GAP
Thus an attempt is made to evaluate the
performance of SEZs in India in relation to three
attributes—namely, exports, employment and
investment. Further land use has also been studied.
No tool for growth measurement and continual
performance monitoring of SEZ has been developed .
The present Research attempts to develope this
monitoring tool in order to generate a competitive
environment for SEZ operations to allow the
Decision makers to go for a periodical course-
correction.

8. RESEARCH PROBLEM
Economic development through Export led growth
strategy (ELG).
SEZ led to INR 1,75,874 crore worth of revenue loss
during 2013-14 (CBEC).
Implementation of SEZ policy, 2000 has come under
heavy criticism.
Lack of clarity in Incentive package: only 15 years
exemption on export income
First 5 years - 100%; thereafter, 50 % (next 5 years);
50 %( next 5 years)

10. S.No. Name of the Zone
No. of
Notified
SEZs
Information
Received
Total Notified
Area
Total Area
Utilized
(Area in
Hectares)
Area lying
vacant in
Processing Area
(Area in
Hectares)
1 Cochin Special Economic
Zone
65 65 3192.49 1298.04 1534.00
2 Madras Special Economic
Zone
58 58 5380.42 2202.64 2738.56
3 NOIDA Special Economic
Zone
82 82 4671.53 671.50 1288.08
4 Vishakhapatnam Special
Economic Zone
80 80 12168.68 4172.01 4425.85
5 Kandla Special Economic
Zone
33 33 12889.99 6880.26 5172.89
6 Falta Special Economic Zone 20 20 1264.64 571.13 774.25
7 SEEPZ Special Economic
Zone
70 70 8236.02 1893.48 5376.40
8 Total 408 408 47803.77 17689.06 21310.03
Zone wise Notified Land Area Details (as on 23 Jun 2015)
Source: Ministry of Commerce and Industry, Department of Commerce, Government of India as seen
on https://www.sezonline-ndml.co.in/User/SEZ_LAND_DATA_PROVIDED_BY_MOCI.pdf

11. OBJECTIVES
To understand the concept of SEZ
Make analytical study of SEZ policy 2000.
To examine the economic effects of SEZs in Indian
Economy in terms of Export, Investment & Employment.
To present a comparative picture of the 7 public sector
SEZs
To find the best performing public sector SEZ, making
the optimum use of its scarce resources to generate
optimum output
Last but not the least, to develop a tool for periodical
monitoring of SEZs.

12. RESEARCH QUESTION
Do the Indian SEZs have the potential to optimize
their activities for achieving their establishment
objectives and act as engines of Economic growth?

13. RESEARCH METHODOLOGY
In order to make the study more systematic
following framework has been adopted.
Sample selection: 7 Central Government SEZs;
Purposive Sampling
Period of study: 2005-2006 till 2014-15
Statistical tools used in the study: Mean, Standard
Deviation, CAGR, correlation, t- test; f-test; ANOVA;
Quantitative technique: Goal-programming
application

14. Data Collection
 a. Development Commissioner’s Office of respective SEZs
 b. Economic Survey of India.
 c. Export Import data bank.
 d. Export Promotion Council for Export Oriented Units (EOUs) and SEZ.
 e. SEZ and Department of Commerce Website.
 f. Reserve Bank of India Website.
 g. Department of Industrial Policy and Promotion Website.
 h. Journals- Journal of Development Studies, Economic and Political Weekly, Chartered
Accountant, Social Action, Man & Development, Mainstream, Indian Journal of
Economics, Third Concept, The Management Accountant, Asian Survey, Indian
Management Studies Journal, etc
 i. Books– SEZ Manual 2007; Special Economic Zones/EOUs/ EHTPs & STPs- Law &
Practice 2008; Special Economic Zones- Issues, Laws and Procedures; Special Economic
Zones and the Economic Transition in China; Special Economic Zones in India- Lesson
from China etc.

15. Limitations of the Study
 Confined for the period 2005-2015.
 Due to the unavailability of data even after applying under the Right to
Information Act (RTI), the researcher was forced to carry out with the
available data which ultimately affects involving more number of
parameters in measuring the performance of the SEZs.
 The involved SEZ were hesitant to provide data which disabled the
researcher to collect data beyond the performance indicators or else the
study could have involved more number of performance indicators.
 Websites related to SEZ is not updated and took many follow ups.
 Cost-benefit analysis of SEZs could be done but due to non-availability
of cost data, research is limited to performance/benefit analysis only.

16. RESEARCH DESIGN in a nutshell
STEP 1: Statistical tests to check for level of
dependency between the performance variables
 7 central government SEZs are analyzed in terms of
Development indicators- Export, Investment &
Employment; identified by SEZ Policy of 2000.
 This involves- Finding Correlation coefficient and
testing the significance of correlation.

17. HYPOTHESIS

18. HYPOTHESIS

19. Inter- region study:
 Cumulative Indian SEZ in comparison to Indian Scenario
 Eg
 ISEZ’s Export- India’s Export
 ISEZ’s Employment- India’s Employment
 ISEZ’s Investment- India’s Investment
 Individual SEZ in comparison to cumulative Indian SEZs
 Eg-
 Export of Noida SEZ correlation with- Export of Indian SEZs &
 Employment of Noida SEZ correlation with- Employment of Indian
SEZs
 Investment of Noida SEZ correlation with- Indian SEZs Investment
Intra- region study:
 Correlation between Export, Investment & Employment of SEZs- ISEZ
and Public sector SEZs

20. STEP-2 GOAL PROGRAMMING-Principles
 Application of Goal Programming Model
 PRINCIPLES OF GOAL PROGRAMMING
 Convert Multiple Objective into Single Goal by Minimizing
deviations between: Target Values & Realized results i.e.,
o Minimize under or overachievement of target (Minimize d– or
d+ as the case may be)
o To understand it more clearly,
o Say, x1=1, x2=1 Then obviously, x1 + x2 = 2
o However, if the Goal is to make x1 + x2 =1, we add a negative
quantity d- (called deviation variable d-), with a value of -1, and
re-write the equation as, x1 + x2 + d- = 1 then the equation is
satisfied.

21. GOAL PROGRAMMING-Data Preparation
PERFORMANCE OF SEZ FROM 2005-2006 TO 2014-2015
S E Z-
DECISION VARIABLE-
SANTACRUZ
X 1
VIZAG
X 2
COCHIN
X 3
FALTA
X 4
KANDLA
X 5
MADRAS
X 6
NOIDA
X 7
Export Sum Total of 10
years (2005-2006 TO
2014-2015), Rs Crore
258449.97 14958.22 121331.27 10730.332 25036.28 58974 84078.932
Investment Sum Total of
last 10 years (2005-2006
TO 2014-2015), Rs Crore
191311.61 7868.49 5071.69 2289.41 5204.99 22635 89325.44
Employment in 10th year
(2014-2015), No. 360571 4647 23152 11546 25759 42197 47715
Problem Statement
The study is about selecting or rejecting a SEZ based on its overall
performance i.e. Maximum of cumulative Export is attained with Minimum
Investment yielding a Maximum Employment at the end of 10th
year.

22. GOAL PROGRAMMING-Formulation
If, X1, X2 …. = 0, the Equations are satisfied
If, X1, X2 …. = 1, the Equations are not satisfied
258449.97 X1 + 14958.22 X2 + 121331.27 X3 +
10730.332 X4 + 25036.28 X5 + 58974 X6 + 84078.932
X7 = 0
191311.61X1 + 7868.49X2 + 5071.69X3 + 2289.41X4 +
5204.99X5 + 22635 X6 + 89325.44X7 = 0
360571X1 + 4647X2 + 23152X3 + 11546X4 + 25759X5 +
42197 X6 + 47715X7 = 0
In every Eqns, how to have one Xi=1 and rest as “0” ?

23. GOAL PROGRAMMING-Output
+ve / -ve
SELECTION CRITERIAPERFORMANCE MEASUREVIZAG COCHIN
SANTACR
UZ
FALTA KANDLA MADRAS NOIDA
INITIAL
INPUT
CHOOSE ANY 1 Available SEZs 1 1 1 1 1 1 1 0 = 1
MAXIMUM
EXPORT
Export Sum Totalof
last 5years, Rs Crore
10,973.57 86,438.85 205,338.29 6,020.11 16,026.77 41,873.00 47,626.76 0
=
205,338.29
MINIMUM
INVESTMENT
Investment Sum
Totalof last5 years,
Rs Crore
5,507.82 3,069.90 158,583.32 567.79 2,730.69 11,309.00 53,316.44 0
=
567.79
MAXIMUM
EMPLOYMENT
Employmentin 5th
year, No.
22,738.00 87,367.00 1,321,919.00 55,561.00 117,914.00 197,183.00 254,739.00 0
=
1,321,919.00
INPUT DATA TABLE
SEZOptions (DECISION VARIABLES)
TARGET (RHS)
CONSTRAIN
ING
RELATION
OBJECTIVE
FUNCTION
MINIMIZE ALL
DEVIATION
VARIABLES
1465676.2
TARGET
CELL
SOLUTION TO
PROBLEM
VIZAG COCHIN
SANTACR
UZ
FALTA KANDLA MADRAS NOIDA
INITIAL INPUT 0 0 0 0 0 0 0FINAL OPTIMAL
OUTPUT 0.0000 0.0000 0.0000 1.0000 0.0000 0.0000 0.0000
SELECTED

25. OUTPUT

29. CONCLUSION
Strengthen the Overall Best performing Zone- Noida
and keeping it as BENCHMARK strengthen other
SEZs for Balanced growth of Regions
Holistic approach of Land Allotment (Ref:Table).
Vacant un-utilised Land may be re-allotted to better
performing sectors
Ensures Pragmatic approach by Central & State
Governments
Assessment of Opportunity Cost to Primary Sector