19804429 project report on sez by nitish

8/10/2019 19804429 Project Report on SEZ by Nitish

1/68

Executive Summary

Special Economic Zones (SEZs) were established in many countries as testing

grounds for implementation of liberal market economy principles. SEZs are

viewed as instruments enhancing the acceptability and credibility of

transformation policies, attracting domestic and foreign investment and also for

the opening upon the economy. SEZs in India seek to promote the value addition

component in e ports, generate employment as well as mobili!e foreign

e change. "lobally, many countries initiated #ree $rade %greements (#$%s)

which eventually led to a spurt in investments in infrastructure developments for

#ree $rade Zones (#$Zs) and SEZs. % close e amination of the evolution of SEZs

in countries with similar economies as India eg& 'hina, Iran, %E and ordan,

will help us to understand their success stories and thereby implement those

factors, in order to curb the SEZ bottlenecks faced by India today. $he Shen!hen

SEZ in 'hina is a perfect e ample of a SEZ success story. In India, the

government has been proactive in the development of SEZs. $hey have

formulated policies, reviewed them occasionally and also ensured that ample

facilities are provided to the SEZ developers as well as the companies setting up

units in SEZs. $hese favourable conditions resulted in the biggest ever corporate

rush for the development of SEZs in India. *ver + - companies received formalapproval, /+ companies received in0principle approval and 11 companies

received notification to set up SEZs. $he Indian government is e pecting an

investment to the tune of 2s.3 ,3/ crore ( S4 +5- million) and an additional

1


2/68

6ob creation for 3,53,-3+ individuals in SEZs by 4ecember +117. 4espite all the

efforts, SEZ development has become the most controversial issue for India

today. It is very important to understand all aspects of SEZs such as basic

concepts, its various models and the life cycle of its business before initiating any

policy or investments for these pro6ects. 4espite the fact that the e isting SEZ %ct

and #4I 8olicies for SEZs are very lucrative& the rationale behind the rapid

economic and industrial growth of the Indian SEZ policy is being 9uestioned. $he

diagram below is a snapshot of the different typesof SEZs. :ith the unending list

of trouble0shooting problems in India, it becomes very important to understand

the business of SEZs in India. $he report emphasi!es on certain issues which

brings clarity to the SEZissue. $he report helps you answer 9uestions like;

Special Economic Zone (SEZ) is a duty free area which is meant for the purposes

of trade operations, duties and tariffs for investors. SEZs are specifically

demarcated areas within the country where raw materials and capital goods can

be imported duty free from abroad or the domestic market and a special package

of ta holiday and incentives are given with a view to boost e ports from the

2


3/68

country.


4/68

INTRODUCTION

4


5/68

India was one of the first in %sia to recogni!e the effectiveness of the E port

8rocessing Zone (E8Z) model in promoting e ports, with %sia?s first E8Z set up

in @andla in 7/3. :ith a view to overcome the shortcomings e perienced on

account of the multiplicity of controls and clearances& absence of world0class

infrastructure, and an unstable fiscal regime and with a view to attract larger

foreign investments in India, the Special Economic Zones (SEZs) 8olicy was

announced in %pril +111.

% Special Economic Zone (SEZ ) is a geographical region that has

economic laws that are more liberal than a countryAs typical economic laws. $he

category ASEZA covers a broad range of more specific !one types, including #ree

$rade Zones (#$Z), E port 8rocessing Zones (E8Z), #ree Zones (#Z), Industrial

Estates (IE), #ree 8orts, rban Enterprise Zones and others. $he most successful

Special Economic Zone is in 'hina, Shen!hen that has been developed from a

small village into a city with a population over 1 million within +1 years.

#ollowing the 'hinese e amples, SEZ have been established in several countries,

including India. %ccording to :orld Bank estimates, as of +115 there are more

than ,111 pro6ects taking place in SEZs in +1 countries worldwide. SEZs have

been implemented using a variety of institutional structures across the worldranging from fully public (government operator, government developer,

government regulator) to AfullyA private (private operator, private developer,

public regulator). In many cases, public sector operators and developers act as

5


6/68

9uasigovernment agencies. SEZs are often developed under a 8ublic08rivate0

8artnership arrangement, in which the public sector provides some level of

support to enable a private sector developer to obtain a reasonable rate of return

on the pro6ect.

MAIN OBJECTI ES O! T"E SEZ ACT ;

( a) "eneration of additional economic activity

(b) 8romotion of e ports of goods and services&

(c) 8romotion of investment from domestic and foreign sources&

(d) 'reation of employment opportunities&

(e) 4evelopment of infrastructure facilities&

ROUTES !OR !OREI#N DIRECT IN ESTMENT

Automatic Route $ Co prior "overnment approval is re9uired if

the investment to be made falls within the sectoral caps specifiedfor the listed activities. *nly filings have to be made by the Indian

company with the concerned regional office of the 2eserve Bank of

6


7/68

India (D2BI ) within 1 days of receipt of remittance and within 1

days of issuance of shares

!I%B Route $ Investment proposals falling outside the automatic

route would re9uire prior "overnment approval. #oreign

Investment re9uiring "overnment approvals are considered and

approved by the #oreign Investment 8romotion Board (D#I8B ).

4ecision of the #I8B usually conveyed in -0/ weeks. $hereafter,

filings have to be made by the Indian company with the 2BI

CC!I Route $ Investment proposals falling outside the automatic

route and having a pro6ect cost of 2s. /,111 million or more would

re9uire prior approval of 'abinet 'ommittee of #oreign Investment

(D''#I ). 4ecision of ''#I usually conveyed in F0 1 weeks.

$hereafter, filings have to be made by the Indian company with the

2BI

0

A%%RO A& MEC"ANISM AND ADMINISTRATI E SET U%

O! SEZS

7


8/68

nder the %ct, SEZ could be set up either 6ointly or severally by the 'entral

"overnment, State "overnment, or any person (including a private or public

limited company, partnership or proprietorship); for manufacture of goods& or

Gfor rendering services& or

Gfor both manufacturing of goods and for rendering services& or

G %s a #ree $rade and :arehousing Zone.

Approval mec'ani(m

$he developer submits the proposal for establishment of SEZ to the concernedState "overnment. $he State "overnment has to forward the proposal with its

recommendation within -3 days from the date of receipt of such proposal to the

Board of %pproval. $he applicant also has the option to submit the proposal

directly to the Board of %pproval. $he Board of %pproval has been constituted by

the 'entral "overnment in e ercise of the powers conferred under the SEZ %ct.

%ll the decisions are taken in the Board of %pproval by consensus. $he Board of

%pproval has 7


9/68

*nce an SEZ has been approved by the Board of %pproval and 'entral

"overnment has notified the area of the SEZ, units are allowed to be set up

in the SEZ. %ll the proposals for setting up of units in the SEZ are

approved at the Zone level by the %pproval 'ommittee consisting of

4evelopment 'ommissioner, 'ustoms %uthorities and representatives of

State "overnment. %ll post approval clearances including grant of

importer0e porter code number, change in the name of the company or

implementing agency& broad banding diversification, etc. are given at theZone level by the 4evelopment 'ommissioner.

$he performance of the SEZ units are periodically monitored by the

%pproval 'ommittee and units are liable for penal action under the

provision of #oreign $rade (4evelopment and 2egulation) %ct, in caseof

violation of the conditions of the approval. 'onse9uent upon the SEZ

2ules, +/ companies had received formal approvals to set up SEZs, and

another /7 had been granted in0principle clearance by the government.

INCENTI E* !ACI&ITIES TO SEZ ENTER%RISES+

Operational a)vanta,e(+

Sectoral restrictions on manufacturing sector inapplicable within SEZ

%ll SEZ activities on self certification basis

9


10/68

Single window clearance

Inter unit transfer of goods permitted

Co routine customs e amination of e port and import cargo

#orward looking labour laws under consideration

!i(cal a)vanta,e(+

11= #4I for manufacturing units operating inside SEZs through

automatic approval route in almost every sector.

11= profit repatriation facility from e port earnings

permission to sell within 4omestic $ariff %rea (4$%) and an e emption

from a Special %ddition 4uty (S%4) sub6ect to the company having a

positive Cet #oreign E change 8osition (C#E8)

supplies from 4$%s to be treated as e ports while those from SEZs to

4$%s to be treated as imports

investments in SEZ treated as infrastructure development and eligible for

e emption local inputs at reduced cost without the e cise, H%$ and other

levies of India

duty free import of materials for construction, capital goods and goods

re9uired for * procured locally duty free could be utili!ed over the

approval period of 3 years.

4omestic sales by SEZ units will now be e empt from S%4.

4omestic sale of finished products, by0products on payment of applicable

'ustom duty.

4omestic sale re6ects and waste and scrap on payment of applicable

'ustom duty on the transaction value.

Income tax

8hysical e port benefit

11= I$ e emption ( 1%) for first 3 years and 31= for + years thereafter.

2einvestment allowance to the e tend of 31= of ploughed back profits

'arry forward of losses

!orei,n Direct Inve(tment+

11= foreign direct investment is under the automatic route is allowed in

manufacturing sector in SEZ units e cept arms and ammunition,

e plosive, atomic substance, narcotics and ha!ardous chemicals,

11


12/68

distillation and brewing of alcoholic drinks and cigarettes , cigars and

manufactured tobacco substitutes.

Co cap on foreign investments for SSI reserved items.

Ban-in, * In(urance*External Commercial Borro.in,(

Setting up *ff0shore Banking nits allowed in SEZs.

*B ?s allowed 11= Income $a e emption on profit for years and 31 =

for ne t two years.

E ternal commercial borrowings by units up to J 311 million a year

allowed without any maturity restrictions.

#reedom to bring in e port proceeds without any time limit.

#le ibility to keep 11= of e port proceeds in EE#' account. #reedom to

make overseas investment from it.

'ommodity hedging permitted. E emption from interest rate surcharge on import finance.

GSEZ units allowed to Kwrite0off? unreali!ed e port bills.

INCENTI E* !ACI&ITIES

&ocation o/ SEZ in In)ia

At pre(ent t'ere are 0 /unctional (pecial economic 1one( locate) at+

Santacru! (


13/68

'ochin (@erala)

@andla and Surat ("u6arat)

'hennai ($amil Cadu)

Hisakhapatnam ( %ndhra 8radesh)

#alta (:est Bengal)

Coida ( ttar 8radesh)

Indore (


14/68

State No o/ SEZ( Inve(tment 5R( 4n7


15/68

15


16/68

Example o/

Mun)ra SEZ 5MSEZ7


17/68

Economic Zone (SEZ) at


18/68

$he %dani "roup is one of India?s most dynamic business houses in India with an

annual turnover of IC2 /, 111 crore. % leader in international trading and

infrastructure development, the %dani "roup is engaged in a continuous

endeavour to ma imi!e potentialities, and break new ground, by synergi!ing the

multiple core competencies of the "roup. #ounded in 7FF by 'hairman


19/68

Bene/it( o//ere) 4y t'e SEZ

$he "overnment of India through the SEZ 8olicy has made available a basket of

Incentives, E emptions, 'oncessions and 8rivileges (IE'8) to the SEZ

4evelopers and the SEZ nits. $he benefits available to the 4eveloper and nit

under the SEZ 8olicy, essentially translate into ;

2educed 'ost of Infrastructure

2educed 'ost of tilities

2educed 'ost of 2aw


20/68

8ro imity to Corthern :estern hinterland of the country which

generates over -+= of the total international trade of India.


21/68

%irport, 2ailway, 2oad Sea routes for transportation

4eveloped land (leveled landscaped) with boundary walls and street

lights

tilities O 8ower, :ater, "as, $elecom, Info0comm

4rainage, Sewage, :ater 4esalination 2ecycling

Mousing, Education, Mealthcare recreational facilities

:arehouses, 'ontainer freight stations

$esting 'ertification labs

Silos, 'ool 'old storages

Roa)


22/68

$here is an airstrip within


23/68

4omestic $ariff %rea (4$%) supplier is eligible for e port benefits on

SEZ sales making the sourcing cost competitive.

E ternal 'ommercial Borrowings upto S J 311


24/68

#reedom to reali!e and repatriate e port proceeds within + months

Co limit on 9uantum of 4$% sales

#oreign investments allowed for items generally reserved for the

Small Scale sector

'ontract manufacturing permitted with units outside the SEZ or in

other SEZs

Strate,ic location

$he 8ort is strategically placed with respect to the northern and western

hinterland, to which it is well0connected by both railways and roadways. $his

area generates nearly 51= of India?s containeri!ed international trade. $he 8ort

has privately developed a 35 km railhead which is connected to the nearest

railhead. $he Bhu6 airport is a short drive away, and proposed


25/68

'argo Storage #acilities

'argo Mandling Services

In$'ou(e /acilitie(

$he port is an end0to0end comprehensive service provider with state0of0the0art

facilities including;

G


26/68

$he port operates with a (in,le .in)o. clearance system of

management which ensures swift clearance and rapid movement of cargo

and 9uick turnaround time.

Cu(tom( an) Exci(e

4uty free import (or domestic procurement), without any license or

specific approval, of capital goods, raw materials, consumables,

spares, packing materials, office e9uipment, and anything else

re9uired for implementation of their pro6ect in


27/68

'arry forward of losses to the ne t financial > accounting year

!orei,n Direct Inve(tment 5!DI7

11= #4I under the automatic route is allowed in


28/68

Companie( Act

4irectors of SEZ units do not have to fulfill the re9uirement of +

months domicile in India prior to appointment as 4irector

Su4$Contractin,*Contract !armin,

SEZ units are allowed to sub0contract part of their production to units

in the 4omestic $ariff %rea or to other E port *riented nits or SEZ

units

SEZ units may also sub0contract part of their production abroad

%gro industries in SEZ are allowed to provide inputs and e9uipment

to contract farmers in the 4omestic $ariff %rea for their supplies

Can /orei,n companie( (et up a unit in a SEZ:

Pes, a foreign company can take the %utomatic %pproval 2oute to set up a

unit in an SEZ.

Net !orei,n Exc'an,e in/lo. 8 Net !orei,n Exc'an,e out/lo. ; <

SEZ units have to provide periodic reports to the 4evelopment

'ommissioner and Zone 'ustoms as provided in %ppendi -0I # of

the Mandbook of 8rocedures, Hol.

SEZ units have to e ecute a bond with the Zone 'ustoms for their

operations in the SEZ

%ny company set up with #oreign 4irect Investment (#4I) has to also

be incorporated under the Indian 'ompanies %ct to operate in India.

28


29/68

Development = /uture plan(

$he 8ort management has ambitious plans of increasing capacity to +1


30/68

total investment is worth crores. % pro6ect under management preview is a

stacker0cum0reclaimer of +111 $8M handling capacity for the better stacking and

reclaiming of coal. %long with stacker0cum0reclaimer, we also propose in0motion

wagon loading system for faster and more accurate loading. :ith the help of in0

motion wagon loading system the 8ort will be able to handle about 3 to 5 coal

rakes a day. $he proposed facility will be environment0friendly, increase output,

and enhance speed of handling with proper stockpile capacity, and is e pected to

be operational by une +115. % 'losed "odown of ++,111 s9 mtr, and a Mard

Stand of F,111 s9 mtr are under construction, while another 'losed "odown of

1,111 s9 mtr and a Mard Stand 0 +,7+,111 s9 mtr are on the cards. % new berth

is being constructed to add to the e isting - all0weather multipurpose berths. $he

new $erminal 0+ 6etty is under construction and is being carried out by

s.Simple . $erminal + etty has a length of 353 mtr, and is -5.3 mtr wide, and

can accommodate cape si!e vessels with its draft of F mtr. $he berth, which is a

crore investmen, is e pected to be completed by uly +11/. :ork on a new

terminal (4B$ or '$0+) to e9uip the 8ort to handle greater container traffic is

also in progress. $he proposed location of the new terminal is in continuation

with the western side of the e isting container berth. $he work has been awarded

to L $ E''. $he length of the berth is / + mtr, of -5.3 mtr width, with an

available draft of F mtr. $he new container terminal is e pected to be completed

by %pril +115. $he construction of the 6etty alone is e pected to cost 3- crores.

'ape si!e vessels will be able to berth alongside at this terminal, will have a back

up area of -51 mtr Q 31 mtr, and will be provided with - 2


31/68

1 km long e ternal two0lane road connecting


32/68

safety e9uipment are kept at standby at the #ire Station to meet any emergency

situation inside and outside the port premises. Besides these crew, # S personnel

are posted at all the critical and ha!ardous area. $he # S department has

established safe work culture by implementing work permit system for various

activities. "%8L # S also e tend its services for community development,

imparting training to nearby village, town, schools in collaboration with C480

"S4


33/68

Basic infrastructure ahead of the national average

Uttarakhand compares favourably !th the all "nd!a a##re#ates !n term of the

spread of bas!c !nfrastructural fac!l!t!es$ % useful !nde& of th!s !s the access

of households to d!fferent !nfrastructure fac!l!t!es$ 'n these parameters( the

state f!#ures ell ahead of the nat!onal avera#es$)h!le the per cent of

households !th electr!c!ty connect!on !n 2001 as at 60 per cent( those !th

source of dr!nk!n# ater !th!n the household prem!ses ere at 44$8 per

cent$ *he spread of f!nanc!al serv!ces !n the state !s also robust( as the state

ranks fourth !th respect to the proport!on of households ava!l!n# bank!n#

serv!ces$

33


34/68

Transport & Communication Network

*he state has a #ood transport and commun!cat!on net ork$ *he state has a

total len#th of 536 km of nat!onal h!#h ays and 1138km of state h!#h ays

runn!n# throu#h !t$ *he len#th of metalled roads per lakh of populat!on !s

h!#her than the all+"nd!a a##re#ate( thou#h due to the nature of the terra!n

the len#th of metalled roads per thousand s,$ km$ of area !s relat!vely lo er$

34


35/68

States/UTs As on !"!#"$!!%

Uttarakhand 5$4

"nd!a 7$49

Tele ensit' A Comparison As on (" "$!!$

Ur)an *ural Total

Uttarakhand 10$99 1$13 3$65

-harkhand 5$25 0$3 1$4

.hhat!s#arh 5$14 0$28 1$26

Uttar /radesh 14$09 0$55 2$72

"nd!a 12$03 1$21 4$22

+inancial ,nfrastructure

Uttarakhand !s host to a number of banks and f!nanc!al !nst!tut!ons$ ur!n#

2002+03( the state had 646 nat!onal!sed bank branches and 173 re#!onal rural

bank branches$ *he state also has s!#n!f!cant presence of commerc!al( co+

operat!ve and cooperat!ve a#r!culture and rural development bank$ .red!t to

depos!t rat!o stood at 24$8 per cent dur!n# the year$

Natural *esource Advantage

.over!n# an area of 53843 s, km( Uttarakhand has a very d!verse

topo#raphy ran#!n# from pla!ns !n the south to sno covered peaks !n orth$

%bout 65 per cent of the #eo#raph!cal area of the state !s covered under

forests$

35


36/68

-utturn of .a or +orest 0roduce in Uttarakhand 1(22#324 to (2253226

Name Unit 7ear

+orest 0roduce (22#324 (224325 (225322

*!mber .u$ $ 122640 242266 314405

!re ood .u$ $ tacked 35042 49290 44295

es!n tl$ 72500 32968 57665

amboo undle 10418 13346 184

*ural ,nfrastructure

istri)ution of villages as per availa)ilit' of services 186

Unit 9 (

km"

( to :

km

; :

km

Total

r!nk!n# ater 94$5 5$5 0$0 100$0.o+educat!onal /r!mary school 60$8 35$6 3$6 100$0

econdary school oys 13$6 63$6 22$8 100$0

econdary school :!rls 2$8 37$4 59$8 100$0

;!#her econdary oys 7$0 61$4 31$6 100$0

;!#her econdary :!rls 0$5 26$9 72$6 100$0

%llopath!c .l!n!c( !spensary and

/;.

3$6 35$3 61$1 100$0

etal roads !n v!lla#e 40$1 35$2 24$7 100$0

a!l ay tat!on 0$1 2$8 97$1 100$0

us top 15$7 51$5 32$7 100$0

36


37/68

/ost+'ff!ce 15$6 59$0 25$4 100$0

.ommerc!al ank 3$3 40$5 56$3 100$0

,ndustrial ,nfrastructure

,ndustrial


38/68

,,< 0antnagar3 also an " ' 14(000 compl!ant estate !th orld class

!ndustr!al !nfrastructure !s to be spread over 3500 acres of land of h!ch

2500 acres !s proposed to be developed as an pec!al


39/68

the pro?ects free$ *he pro?ects ould be set up !th a total !nvestment of

appro&$ U 1174 m!ll!on$ % deta!led pro?ect report !s also be!n# prepared by

the */. on the =ata *apovan hydel pro?ect !th a capac!ty of 108 )$

,T@


40/68

% consort!um compr!s!n# ma?ors from :ermany( *urkey and ;olland

!nclud!n# %dan!


41/68

*he tate .ab!net has dec!ded to s!#n a memorandum of understand!n#

oU !th the )orld ank for a ne dr!nk!n# ater scheme$ Under the

a?aldhara scheme( the )orld ank ould prov!de appro&$ U 103

m!ll!ons loan to the tate :overnment to cover those areas( h!ch are fac!n#

dr!nk!n# ater shorta#e$

North "nd!an states l!ke Uttarakhand and ;!machal /radesh are emer#!n# as

the most favoured dest!nat!ons for electron!cs manufacturers because of sops

offered by the state #overnments and #ood ork culture$ *he state

#overnments !n north "nd!a not only offer benef!ts l!ke ta& hol!days(

e&empt!on from e&c!se dut!es and land at cheap pr!ces( the ork culture

there !s #ood and there !s no m!l!tant trade un!on!sm$ urpr!s!n#ly( former

lead!n# states l!ke aharashtra and )est en#al have no taken a back seat

as far as the electron!cs !ndustry !s concerned$ )h!le cost of labour and

po er !s h!#h !n aharashtra( m!l!tant trade un!on!sm and lack of #ood ork

culture pla#ue )est en#al$ % lar#e number of compan!es are flock!n# to

Uttarakhand( here there !s full e&empt!on from sales ta& and no e&c!se duty

for ten years bes!des !ncome ta& benef!ts$ :eor#e @an er er e( ch!ef

operat!n# off!cer of ahara .omputers( says that ;!machal /radesh and

41


42/68

Uttarakhand are #!v!n# pec!al .oncess!onal "ndustr!al /acka#e to attract

the manufactur!n# compan!es for sett!n# up the!r product!on un!ts there$

ett!n# up of manufactur!n# un!ts !n these states ould boost the

!nfrastructure and further accelerate the development of the states$ ahara

has set up !ts manufactur!n# un!t !n Uttarakhand because of !ts pro&!m!ty to

elh!( and other conduc!ve factors l!ke labour pol!cy of the #overnment(

cheap electr!c!ty and ater( ta& benef!ts( subs!d!es for transport( road

!nfrastructure and pro&!m!ty to a!rport( as !t !s comfortable for !ts nature of

bus!ness $

uresh :upta( d!rector+operat!ons at "nte& *echnolo#!es "nd!a ( too f!nds

Uttarakhand other than ;!machal /radesh and -ammu !n ->D as a #ood

locat!on for manufactur!n# of electron!cs for the same reasons$

!rc


43/68

fac!l!ty !n the country at /antna#ar( Uttarakhand( for !ts latest ran#e of

desktop computers( orkstat!ons( notebooks and servers$

%dvanta#e Uttarakhand

Uttarakhand !s a youn# state( hav!n# been carved out of Uttar /radesh$ "t

as formed on 9th ovember 2000 and accorded spec!al status by the

central #overnment$ )!th!n a short span of !ts e&!stence( the state has several

#ood th!n#s #o!n# for !t$ )!th !ts vast natural resource base and enormous

po er potent!al( Uttarakhand holds the potent!al of be!n# one of the most

prosperous states !n the country$ %lso( levels of l!teracy !n the state are

h!#her than the nat!onal avera#e$ *hese are ?ust a fe of the reasons hy !t !s

attract!n# electron!cs and "* manufacturers$ tate "ndustr!al evelopment

.orporat!on of Uttarakhand =!m!ted " .U= ( a #overnment of

Uttarakhand


44/68

!n!t!ated by the state #overnment( as also those about to be !n!t!ated( to

develop the potent!al$

Governments labour policy. *he #overnment of Uttarakhand has created an

env!ronment conduc!ve to the rap!d and susta!nable !ndustr!al development

of the state$ "t enhances the

flo of !nvestments !nto the !ndustry and !nfrastructure$ y do!n# so( the

#overnment !s look!n# at #enerat!n# add!t!onal employment opportun!t!es

and has developed a manufacturerfr!endly

labour pol!cy$

Cost of electricity and water. *he prov!s!on of un!nterrupted po er to

!ndustr!al un!ts !s one of the most cruc!al factors for ensur!n# rap!d !ndustr!al

#ro th$ "n order to #!ve a boost

to the !ndustr!al!sat!on( a spec!al tar!ff has been !ntroduced$ )!th the

commencement of the *ehr! am /ro?ect( a!ver of peak hour restr!ct!on for

all !ndustr!es( !nclud!n# heavy !ndustr!es(

!s also proposed$ *he state has abundant ater supply( h!ch !s e&tremely

!mportant for any manufactur!n# un!t$

44


45/68

Tax benefits/income tax. *he compan!es also en?oy the ta& benef!ts !n the

state$ *a& benef!ts !n Uttarakhand( for e&ample( !nclude 100 per cent central

e&c!se e&empt!on for ten years$ es!des th!s e&c!se e&empt!on( there !s 100

per cent e&empt!on from !ncome ta& !n the f!rst f!ve years of operat!ons( and

30 per

cent e&empt!on from !ncome ta& !n the ne&t f!ve years of operat!ons$

Subsidies for transport. Under the *ransport ubs!dy cheme of

#overnment of "nd!a( 50 per cent of transport cost on the bas!s of rates

dec!ded by the state #overnment or actual fre!#ht pa!d( h!chever !s less( has

been prov!ded as subs!dy for up to f!ve years from the date of product!on$

Road infrastructure and proximity to airport.

*he state already has a #ood net ork and !s also plann!n# to

connect every v!lla#e( to n and c!ty to local econom!c centres and ma?or

c!t!es !n the state throu#h a net ork of all eather roads$ *he pro&!m!ty to

elh! !nternat!onal a!rport !s another hu#e

advanta#e that !t en?oys$

Proximity to customers. .onnect!v!ty !th other re#!onsFtar#et customer

base !s not a problem$ "n "nd!a( !t !s very d!ff!cult to be close and !th!n the

45


46/68

reach of all the customers$ urther( econom!es of scale may not be ach!eved

!f you set up manufactur!n# at many places$ %va!lab!l!ty of a #ood

transportat!on system plays a very !mportant role to serv!ce customers

eff!c!ently( ,u!ckly and effect!vely$ Uttarakhand

!s very ell connected !th #ood !nfrastructure$

Total cost. *otal cost of manufactur!n# !s less due to the ava!lab!l!ty of

!ncent!ves to manufacturers hen compared to the cost of manufactur!n# for

the un!ts located !n other areas$

Suppliers/raw materials. *hou#h the state doesnEt have any ra mater!al

produced locally( ho ever( be!n# very close to the ma?or hub( !$e$( elh!(

there !s no problem !n arran#!n# ra mater!al$

.ANU+ACTU*,ND *,F


47/68

@ast pool of a natural resource adds to the stateEsattract!veness as an !nvestment dest!nat!on%bundant ava!lab!l!ty of ,ual!ty human resource baseat compet!t!ve rates$

Uttarakhand compares favourably !th the all+"nd!aa##re#ates !n terms of the spread of bas!c!nfrastructural fac!l!t!es$"nvestments !n Uttarakhand en?oy a number of f!scal

benef!ts l!ke the concess!onal !ndustr!al packa#eoffered by the state and the central #overnments$*ehr! ;ydro evelopment !s one of the h!#hestmult!purpose pro?ects to be bu!lt acro

Ot er drivers.


48/68

e#!on the lar#e urban and !ndustr!al cluster around e elh! to market$

3$ *he state a!ms to promote lead!n#+ ed#e technolo#!es and sunr!se

!ndustr!es !n the areas of !nformat!on technolo#y and b!otechnolo#y$

4$ /ubl!c+Fpr!vate+sector !nvolvement !n #enerat!on of po er and

stren#then!n# of the transm!ss!on and d!str!but!on net ork !ll be

encoura#ed !n the state$

5$ *o develop Uttarakhand as a prem!er research centre by levera#!n#

the presence of orld+class research and techn!cal !nst!tutes e&!st!n# !n

Uttarakhand$

*he e "ndustr!al /ol!cy announced !n 2003 by the state #overnment ment

puts !n place the re#ulatory frame ork for UttarakhandEs !ndustr!al!sat!on$

*he /ol!cy !nd!cates that pr!vate resources may be tapped h!le promot!n#

!nte#rated !ndustr!al estates !n Uttarakhand$ " .U= as formed to atta!n

the follo !n# ob?ect!vesG

1$ /romote !ndustr!al development !n the state

2$ /rov!de f!nanc!al ass!stance !n the shape of debt( e,u!ty and venture

cap!tal

3$ evelop !nfrastructure and ass!st pr!vate !n!t!at!ve !n !ndustry and

48


49/68

"nfrastructure " .U= a!ms to !mplement( mana#e pro?ects and prov!de

spec!al!sed f!nanc!al( consultancy and construct!on and prov!de all such

act!v!t!es to promote !ndustr!es and develop !ndustr!al !nfrastructure !n

Uttarakhand d!rectly or throu#h spec!al+purpose veh!cles( ?o!nt ventures(

ass!sted compan!es( etc$ *he spate of concess!ons ava!lable for !ndustr!al

ventures !n Uttarakhand alon# !th the proact!ve #overnment and fac!l!tat!ve

env!ronment has led to more than a thousand


50/68

Power! electricity reforms on t eir way.

*he state .ab!net has dec!ded to b!furcate !ts po er ut!l!ty to carry

out electr!c!ty reforms !n the state$ Uttarakhand /o er .orporat!on =td

U/.= ould be b!furcated !nto separate compan!es !n the transm!ss!on

and d!str!but!on sectors$ )h!le U/.= ould d!str!bute and market

electr!c!ty( a transm!ss!on corporat!on called *ransm!ss!on .orporat!on of

Uttarakhand ould be set up soon and both the ut!l!t!es ould ork

!ndependently$ *h!s has been done !n compl!ance !th the .entral


51/68

.orporat!on of Uttarakhand at the state level$ %part from prov!d!n#

!nformat!on and escort serv!ces to the entrepreneurs( the centres !ll also be

ma!nta!n!n# a data bank$ "ndustr!al !nfrastructure Uttarakhand compares

favourably !th the all+"nd!a a##re#ates !n term of the

spread of bas!c !nfrastructural fac!l!t!es$ *he state has a #ood transport and

commun!cat!on net ork$ "t has a total len#th of 536 km of nat!onal

h!#h ays and 1138 km of state h!#h ays runn!n# throu#h !t$ *he len#th of

metalled roads per 100(000 of populat!on !s h!#her than the all+"nd!a

a##re#ate( thou#h due to the nature of the terra!n the len#th of metalled

roads per thousand s,$ km$ of area !s relat!vely lo er$ "ndustr!al estates and

parks be!n# developed !ncludeG

T e "nte#rated "ndustrial $state% &aridwar.

=ocated ?ust 3 km from elh!+;ar!d ar at!onal ;!#h ay( 225 km from

nat!onal cap!tal elh! and 52 km from state cap!tal ehradun( !t !ll have

electron!cs as onethe proposed !ndustr!es$ "t !ll have orld+class

!nfrastructure and fac!l!t!es l!ke hotel( bank( school( hosp!tal( petrol

pump and #olf course$

51


52/68

"nte#rated "ndustrial $state% Sitar#an'.


53/68

)ater !s ava!lable !n abundance(both #round and surface ater$

.heapest and un!nterrupted po er supply$

k!lled and sem!+sk!lled manpo er !s eas!ly ava!lable$

evelopment !s !n full s !n#$ !nanc!al !ncent!ves offered at ""


54/68

benef!ts of a cluster+based development$ " .U= plays a stellar role !n

!ndustr!al development by prov!d!n# ade,uate

and t!mely f!nance( develop!n# the re,u!red !nfrastructure( ensur!n#

development( technolo#y up#radat!on and sett!n# up of h!#h+technolo#y

pollut!on+ free !ndustr!es$ "t ensures speedy clearances to enable the shortest

leadt!me !n sett!n# up !ndustr!al pro?ects$ " .U= ould be adm!n!ster!n#

all promot!onal schemes of the #overnment for !ndustr!es and adm!n!ster the

s!n#le+ !ndo system$

,T ,N+*AST*UCTU*< ,N,T,AT,F

19804429 project report on sez by nitish

Documents