a project on sez

8/3/2019 A Project on Sez

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SHREY SAXENAVARTIKA JAIN

SHWETA BHATTSURABHI SHARMA



Several fiscal incentives are offered to units settingup operations in SEZs which coupled with abusiness friendly operating environment, wouldresult in increasing levels of productivity, with a

resultant growth in investments & exports.

The zones offer numerous benefits such as:1. Tax incentives.

2. Infrastructure and Utilities.3. Simplified procedures.4. Provisions better suited for foreign investors than

domestic economy



POSITIVE IMPACT OF SEZsSetting up SEZs in such areas can have many positive

effects on these situations as listed below:1)Changing the current occupation pattern

2)New employment opportunities (local recruitment)

3)Self-employment with the compensation money

4).Better infrastructure and living conditions5)Contract opportunities for local population

6)Further self employment opportunities through training

7)Bringing the rural society in the mainstream



NEGATIVE IMPACT OF SEZ·sImplementation of such a large scale venture will most

definitely have negative effects as well. These

negative impacts are of economic as well as socialnature. We now list the possible negative effects thatthey can have:

1)Financial losses to government2)Land grabbing

3)Environmental impact4)Clusters of development5)Employee working conditions



Objective of the study:To study the impact of SEZ on various socio-

economic dimensions of globalization in India.

Research method:We have used descriptive research method for

our study.

Sample size:We have taken the data of only operational SEZ

of India and have not included the expected dataof the upcoming SEZ.



Data collection:

We have used the secondary data available on the site of³Ministry of Commerce & Industry´.

Limitations of the study:1) As it is based on secondary data, so the result may not

be completely true.

2)There are also various other factor affecting the socio-economic dimensions of globalization.3)We have considered only the impact of SEZ on socio-

economic dimension.



Introduction India was one of the first in Asiato recognize the effectiveness of the ExportProcessing Zone (EPZ) model in promoting

exports, with Asia's first EPZ set up in Kandlain 1965. In order to overcome the shortcomingsexperienced on account of the multiplicity ofcontrols and clearances; absence of world-classinfrastructure, and an unstable fiscal regimeand with a view to attract larger foreigninvestments in India, the Special EconomicZones (SEZs) Policy was announced in April2000.



The Special Economic Zones Act, 2005, was passed by Parliament inMay, 2005 which received Presidential assent on the 23rd of June, 2005.The draft SEZ Rules were widely discussed and put on the website ofthe Department of Commerce offering suggestions/comments. Around800 suggestions were received on the draft rules. After extensiveconsultations, the SEZ Act, 2005, supported by SEZ Rules, came intoeffect on 10 February 2006, providing for drastic simplification ofprocedures and for single window clearance on matters relating tocentral as well as state governments. The remaining part of India, notcovered by the SEZ Rules, is known as the Domestic tariff area.



The major incentives and facilities available to SEZ

developers include:-

Exemption from customs/excise duties for developmentof SEZs for authorized operations approved by theBOA.

Income Tax exemption on income derived from thebusiness of development of the SEZ in a block of 10years in 15 years under Section 80-IAB of the IncomeTax Act.

Exemption from minimum alternate tax under Section115 JB of the Income Tax Act.

Exemption from dividend distribution tax under Section115O of the Income Tax Act.

Exemption from Central Sales Tax (CST). Exemption from Service Tax (Section 7, 26 and Second

Schedule of the SEZ Act).



From the above data we can see that prior toSEZ act of 2005 the investment was very lessbefore 2005 &immediately the next year the

investment increase by 45%.

Because of the recessionary effect the FDI

Inflows was less which lead to the decline inthe investment in the SEZ.



SEZ has generated lot of employmentopportunities. The figures given above includeonly direct employment.

The data shows that employment generationgrowth rate was much higher in the year 2005-

06.



Year Employment growth rate

2003-2004 95407

2004-2005 1,00,650 5.50

2005-2006 1,78,000 76.9

2006-2007 2,00,459 12.6

2007-2008 2,80,832 40.1

2008-2009 3,87,439 38.0

2009-2010 4,90,000 26.5



From the figure we can say that because of theSEZ women employment got drastic increase.

In the year 2005-2006 there was major increase

in women employment

High pay-scale, easy transportation facility aremajor factors for that.



Here, we have seen the impact of economicfactors of SEZ on the GDP of India.

From, the regression analysis the impact on

GDP is given by the following regressionequation

GDP= 54.62 ±0.27*Investment ±14.66*Inflation+ 51.37 * Export



Regression Statistics

Multiple R 0.90336691

R Square 0.81607177

Adjusted R square 0.540179433

Standard Error 11.68792632

Observations 6



Coefficients

Intercept 54.61660642

Investment -0.270113457

Inflation -14.6595317

Export of SEZ 51.37395177



Here, we have calculated the socio impact ofSEZ on Indian GDP.

From, the regression analysis the impact on

GDP is given by the following regressionequation

GDP= 119.67 ±0.93*

Women employment ±66.68*Direct employment + 0.48 * population



The regression equations say that for every 1% increase or decrease of theindependent variable shows the increase or decrease of dependentvariable. For e.g.

GDP = 54.62 ±0.27* Investment ±14.66* Inflation + 51.37 * ExportThis equation shows that even though the Investment and Inflation are

showing negative effect on the GDP growth but it is over-powered withthe positive effect of the export volume growth. This shows that theexport from SEZ has great impact on the economy of the country.`

Similarly, another regression analysis to study the impact of social factorson an economy was carried

GDP = 119.67 ±0.93* Women employment ±66.68* Direct employment + 0.48* population.

This equation shows that no doubt the employment generated by this SEZhas a great impact on the welfare of the society and the growth of theeconomy, but as compared to the increase in the population of thecountry the effect is not felt overall. So necessary steps must be taken toincrease the SEZ zones to create more employment opportunities

a project on sez

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