analysis of infrastructural economic planning for special economic zones

P a g e | 1

Analysis of Infrastructural Economic Planning For the Special Economic Zone

Master of technology- Thesis- School of Infrastructure Design and Management

ANALYSIS OF INFRASTRUCTURAL ECONOMIC

PLANNING FOR SPECIAL ECONOMIC ZONES

M.Tech Project-II Report submitted to

Indian Institute of Technology, Kharagpur

In partial fulfillment for the award of the degree

of

Master of Technology in Infrastructure Design and Management

by

Nishanth Vadduri

(09ID6016)

under the guidance of

Prof. Dr. Uttam Kumar Banerjee

Prof.Dr. Joy Sen

SCHOOL OF INFRASTRUCTURE DESIGN AND MANAGEMENT

INDIAN INSTITUTE OF TECHNOLOGY KHARAGPUR

P a g e | 2



MAY 2011

DECLARATION BY STUDENT

I certify that

a. the work contained in this report has been done by me under the guidance of my

supervisor(s).

b. the work has not been submitted to any other Institute for any degree or diploma.

c. I have conformed to the norms and guidelines given in the Ethical Code of

Conduct of the Institute.

d. whenever I have used materials (data, theoretical analysis, figures, and text) from

other sources, I have given due credit to them by citing them in the text of the

thesis and giving their details in the references. Further, I have taken permission

from the copyright owners of the sources, whenever necessary.

Date : Signature of the Student

P a g e | 3



CERTIFICATE BY SPERVISOR(S)

This is to certify that the project report entitled Analysis of Infrastructural

Economic planning for Special Economic Zones, submitted by Nishanth Vadduri

to Indian Institute of Technology, Kharagpur, is a record of bona fide project work

carried out by him under my (our) supervision.

__________________________ ______________________

Superviser Superviser

Date:

P a g e | 4



ACKNOWLEDGEMENT

I express my deep gratitude to my project guide Prof. Uttam K Banerjee and Prof. Joy

Sen for their valuable guidance and Prof. K. S. Reddy for his constant support without

which this project would not have proceeded.

I would also like to thank Prof. Bhargab Maitra, Prof. M. Tiwari, Prof. B. Mohanty, Prof.

R. P. Pradhan, Prof. Sudeshna Mitra, Prof. S Mukhpoadadhyay and Prof. Sudeshna Mitra

for patiently listening to all my reviews and giving positive criticism and constructive

suggestions.

I would like to acknowledge the help extended to me by Shri A. S. P. Sarma, Secretary

(I/c) of VSEZ Authority Court Matters, Publicity matters Central Component of ASID;

Shri Durga Prasad Vadduri – Civil Advocate, Hyderabad.

I thankfully acknowledge the help of my friends Sri Harini Reddy, Anand ( Bawa ),

Samadhan K B, Sandhya Chowdary Potluri , Ashish J Kothari, Minu, Kuna Kranthi Anil

Rao M, Sunil kasina and Krishna P towards the data collection process and for giving me

continuous support.

Above all, I would like to thank my parents, brother, sister in law and finally my dear

Manasa Murty Ledala for giving moral support throughout my project and my life.

Date : Signature of the Student

(Nishanth Vadduri)

P a g e | 5



LIST OF SYMBOLS (OPTIONAL)

List of figures : Fig 1: Aerial view of VSEZ -Duvvada

Fig 2: Free trade warehouse zone

Fig 3: Standard Design Factory

Fig 4: Aerial View of the VSEZ with Road connectivity

Fig 5: Riverside view from falta SEZ

Fig 6: Standard design factory, Falta Sez

Fig 7: Aerial view of the proposed site including the Ragiv Gandhi Airport, Hyderabad

List of Tables :

Tab 01 : Distribution of land use:-

Tab 02 : Work Force and Proposed Land use structure of Urban Centres in Plain areas

Tab 03 : Percentage of developed area

Tab 04 : Size of town

Tab 05 : Water requirements for institutional buildings

Tab 06 : Socio-Cultural facilities:

Tab 07 :Fire

Tab 08 : Commercial Activity:

Tab 09 : Commercial Activity:

Tab 10 : Norms for informal activities

Tab 11 : Recreational Facilities

Tab 12 : Socio- cultural facilities

Tab 13: Parking

Tab 14: Break up area for Frieght Movements:

Tab 15: Data of the Exports of the various Industries (2005-2010)

Tab 16: Results of Regional Shift Tab 17: Excel Sheet explains the procedure for calculating the Equation for IT&ITES Tab 18: Excel Sheet explains the procedure for calculating the Equation for

Pharmaceuticals

Tab 19: Excel Sheet explains the procedure for calculating the Equation for Textile

Industries

Tab 20: Regression equations for selected sectors

Tab 21: Optimized area and employment details of each Sector

P a g e | 6



CONTENTS

Title Page i

Declaration by the Student ii

Certificate by the Supervisor iii

Acknowledgement iv

List of Tables v

List of Figures

Abstract vi

Contents

Chapter 1: Introduction

1.1 Preamble

1.2 Need for the project

1.3 Aim

1.4 Objectives

1.5 Scope and Limitation

1.6 Study approach

1.7 Work methodology

Chapter 2: Literature Review

2.1 Background of India and Andhra Pradesh

2.2 Concept of Special Economic Zone

2.3 Procedure for Setting up the SEZ in India

2.4 Shift and Share Analysis

2.5 Regression Analysis

2.6 Linear Programming Models

P a g e | 7



Chapter 3: Case studies & UDPFI Guidelines

3.1 UDPFI guideline for all Infrastructural facilities

3.2 Design concepts of Special Economic Zone

3.3 Case studies of VSEZ and FALTA SEZ

Chapter 4: Data Framework and Data Analysis

4.1 Data collection

4.2 Tools and techniques for analytical study

4.3 Shift and Share technique of Analysis

4.4 Linear Programming model for Optimum Area calculation

Chapter 5: Proposal and Recommendation

5.1 Proposed Site Location for Hyderabad Special Economic Zone

5.2 Concept of design types of Special Economic Zone

5.3 Selections of Design and Factors involving in the Internal design.

5.4 Calculation of all the Infrastructural facilities by UDPFI guidelines

5.5 A broad outline or layout of the proposed Master plan of Hyderabad SEZ

5.6 Recommendation

…

P a g e | 8



ABSTRACT

In the past years, India has achieved phenomenal economic growth, an

unprecedented development ―miracle‖ in human history. How did India achieve this rapid

growth? What have been its key drivers? Special Economic Zone (SEZ) model is a

commonly used key driver in developing countries to generate economic growth, to

attract foreign direct investment, to increase employment and to improve living

conditions, and thereby secures coordination between economic and urban development

policies aimed at promoting evenness of regional development. With a large number of

special economic zones (SEZ) set to come up within the next few years across the

country, the urban development ministry has expressed concerns regarding urban

planning nightmares that may arise in the form of unplanned new townships on the

periphery of these SEZs. “Infrastructure is the main determinant of SEZ success.”

Hyderabad is uniquely conceived as a fully integrated, functionally viable, and

modern business location. It is also one of the most rapidly growing cities and is currently

the fifth largest city in India. The IT hub in Southern Indian state of Andhra Pradesh is

easily accessible. Regular flights, frequent trains and the excellent road network make

Hyderabad a great travel destination. Hyderabad ranks highest on all the parameters that

are principal factors for an offshore operation, What's more, 23% of India's software

professionals, 14.75 % of India‘s textile work force,18 % in Gems and Jeweler industries

and many more work force are originate from the State of Andhra Pradesh. These stats

easily convey us that Multi Product Special Economic Zone in Hyderabad can achieve

zenith position in all parameters and for the betterment of Andhra Pradesh and India.

This study briefly summarizes the complete infrastructure and economic based

planning for the Special Economic Zone in Hyderabad, a multi product SEZ (HSEZ),

which along with its economic infrastructure can be utilized to develop the region and to

achieve a more balanced urbanization in Andhra Pradesh, unlike other multi product

SEZs in India. This is achieved based on 5 steps. (i) Extensive reviews of the existing

literature on SEZs, (ii) Shift and share analysis using exports, investments and

employments of the industrial sectors (which helps in identifying major sectors having

proper scope in all parameters especially employment), (iii) Case studies- Visakhapatnam

SEZ (issues related to infrastructure such as transportation infrastructure and social

infrastructure), (iv) Validation of the industries selected (optimum area calculation) and

(v) Preparation of master plan for HSEZ- Multi product SEZ. No financial matters are

dealt.

Keywords : Special Economy Zone, Shift and Share Analysis, Planning for Special

Economic Zone.

P a g e | 9



Chapter 1 INTRODUCTION

1.1 Preamble

Area in and around Rajiv Gandhi International Airport, Hyderabad is very attract for the

Foreign Direct Investment and is in huge demand for the Manufacture industries like

textile , aviations industries, electronic equipments, pharma, IT& ITES, etc. Since the

availability of resources like all Infrastructural facilities, various education institutions,

and human power. So adding the Special economic zone will surely ensure the

development of Hyderabad and in turns Andhra Pradesh in terms of Employment since

the main single point agenda of SEZ is the to increase the employment. It has been

proved that Andhra Pradesh being the most successful state in the development of SEZ

and has topped in the number of SEZ list and also the revenue share 5 years.

1.2 Need for the project

Any state or any metro city or any developing city needs to have a Special

economic zone build. This encourages the employment, because in upcoming years due

to the increase of the population employment can be affective. The Special Economic

Zone available are not giving full profit has expected with a few certain target. Since

there is a failure in the planning of SEZ in an Economic based. Any industry coming

doesn‘t make sense in achieving the expected targets. State Andhra Pradesh is the top

states having many SEZ‘s as per the Commerce of India, but only few are generating

revenue and employment like DLF Gachibowli, and VSEZ, etc. As per the discussion

with A S P Sarma the Publicity secretary of VSEZ, says that an Economic based Special

economic zone will fetch the development in all the aspect like revenue, employment,

R& D research, new technology, trading in and out, market improvement, etc. 3 National

Highways passing through the entire state (NH-7,9 and 202), Historically recognized, has

many famous universities like Osmania University, JNTU and Andhra University which

are providing many man power resource, water supply with 2 major river ( Godavari and

Krishna), etc. So finally a planned Economic based Special economic zone helps in

various way and make an value added asset to the developed of Hyderabad in term of

FDI, employment etc.

P a g e | 10



1.3 Aim

The project aims at ―designing a project which helps in the promoting the good rate of

exports and generating the employment in the Andhra Pradesh, India‖. The single point

agenda mentioned above can be achieved through following goals.

Goals 1 - Preparation of a complete master plan of Hyderabad special economic zone.

1.4 Objectives

The following objectives are derived from the above stated goals,

a) To identify the term of requirements in HSEZ for the proper infrastructural facilities.

b) To analyze the leading and lagging industries in the Hyderabad, Andhra Pradesh.

c) To strategically formulate the physical infrastructure facility in both the Processing

and non processing zone.

1.5 Scope and Limitations

a) Carry out all the infrastructure related issue from the existing SEZ‘s available.

b) Tracking out all the loopholes of existing available SEZ‘s and modeling it (if any).

c) Market studies and feasibility survey among the units or firms establishing in the

SEZ.

d) Carry out the relationship and market play among the other firms in the Andhra

Pradesh.

e) No financing aspects of SEZ will be involved in the project.

P a g e | 11



1.6: Study approach

The project goal will be achieved through the following 4 staged study approach

Literature Review

Understand the basic concepts of Special Economic Zone.

Understand terms of requirements

Identify the tools and techniques required to selection of Industrial sectors, areas of

the zone

Relevant case studies

Study the UDPFI Guidelines

Data Collection

Identification of data requirement

Primary data:

Experts opinion, Exports and Imports

Secondary data :

Maps and reports, Research papers and Employment data

Data Analysis

Identification of Infrastructure requirement from UDPFI guidelines reports and case

study

Shift and Share analysis for the data collected Exports and Imports.

Regression Analysis for each sectors selected

Linear Programming Model for Optimum area calculations

Proposal and Recommendation (outcomes)

Selection of the area or zone

Design proposal and suitable recommendation

P a g e | 12



1.7: Work methodology

Economic scenario in the region of

India and Andhra Pradesh Special Economic Zone in

Hyderabad

Need of the Project

Aims, goals and Objectives

Literature Review

Concept of Special Economic

Zone

Tools and Techniques

Case studies on SEZ

Data Collection

Primary Data :

Exports and Imports

Expert Opinion

Secondary data :

Map and reports,

Research papers

Employment data

Requirement of Infrastructural

aspects for the Special Economic

Zone

Data Analysis

Shift and Share Analysis for the

Manufacturing Industries in Andhra

Pradesh

Regression Analysis for the Selected Industries based on Employment data

Linear Programming method for optimum Area calculation

UDPFI Guideline

for Infrastructural

Requirements

Concept of Special Economic Zone

Design

Planning of Processing Area and

Non Processing areas

Preparation of Master Plan of

Hyderabad Special Economic Zone

Problem Identification

P a g e | 13



Chapter 2 : LITERATURE REVIEW

2.1: Background of SEZ in India.

Lately, India, or at least its economic growth, seems to be on everybody‘s agenda

the world over. Its economic development particularly fires the imagination of Indian and

foreign investors. This has led to books being published with titles like ―Global Power

India‖ or slogans like ―China was yesterday, India is today‖. Many institutions such as

the Indo-German Chamber of Commerce or various consulting companies in Germany

sing the Indian tune and recommend doing business in the subcontinent. What to

companies and investors may seem to be a vast new horizon for investment offering a

plethora of opportunities, is not necessarily welcomed unanimously in India. The

development of Special Economic Zones (SEZs) is one element in this vein which is

currently leading to a great deal of conflict between various actors, be they political or

societal. This is all the more interesting as India was certainly not known as a country

that inspired foreign investors.

India is one of the first countries in Asia to recognize the effectiveness of the Export

Processing Zone (EPZ) model in promoting exports. Asia‘s first EPZ was set up in

Kandla in 1965. In the year 1991, after having visited China and one of their Special

Economic Zones (SEZs), the Commerce and Industry Minister‘s reviewed to the way to

improve the climate for exports with FDI in mind – as they realized the need for a level-

playing field to be made available to the domestic enterprises and manufacturers for India

to be competitive globally – as well as enhancing the infrastructure, also in hitherto

underdeveloped regions of India. Since 2000, the government has been seriously thinking

of promoting Indian Special Economic Zones, which the aforementioned Minister, Mr.

Murasoli Maran, once described as ―our best dream projects‖ and as ―magnet and glue –

magnet to attract FDI and glue to identify and bind strategies that will benefit a large

number of people and organizations‖ Accordingly, The Government of India (GoI) first

introduced the concept of SEZ in the Export -Import Policy 2000 with a view to provide

an internationally competitive and hassle free environment for exports.

As the performance of EPZs fell far short of expectations due to various reasons, the

SEZs were conceived as a much larger and more efficient form. The policy provides for

setting up of SEZ‘s in the public, private, joint sector or by State Governments.

After the introduction of SEZ scheme in the EXIM Policy from 01.04.2000, all

existing FTZ/EPZ have been converted to SEZ.

P a g e | 14



2.2: Concept of Special Economic Zone

Special Economic Zones (SEZs) were set up by the Government of India to

augment infrastructure facilities for export production. The Ministry of Commerce and

Industry launched the SEZ scheme in April 2000 to provide an internationally

competitive and hassle free environment for export. SEZs are specifically delineated duty

free enclaves and are deemed to be foreign territories for the purposes of trade

operations, duties and tariffs

Special economic Zones are considered as growth engines that can boost

manufacturing, augment exports and generate employment. Components of a Special

Economic Zone include infrastructural facilities like roads, airports, ports, transport

system, generation and distribution of power, telecom, hospitals, hotels, educational

institutions, leisure and entertainment units, residential / industrial / commercial

complexes, water supply sanitation and sewerage system and any other facility required

for development of the Zone.

Special economic Zones enjoy a number of fiscal benefits including benefits under

Income Tax, Customs, Excise, VAT, Service Tax, etc and hence are considered a very

promising business destination.

2.2.a: What is Special?

The word "Special" mainly means special economic systems and policies. In other words,

the central government gives the special economic zones special policies and flexible

measures, allowing them to utilize a special economic management system.

Special tax incentives for foreign investments in the special economic zones.

Greater independence on international trade activities.

Economic characteristics are represented as "4 primacies":

1) Constructions primarily rely on attracting and utilizing foreign capitals;

2) Primary economic forms are Sino-foreign joint ventures and partnerships as

well as wholly foreign-owned enterprises;

3) Products are primarily export-oriented;

4) Economic activities are primarily driven by market.

Special economic Zones are listed separately in the national planning (including

financial planning) and have province-level authority on economic administration.

P a g e | 15



2.2.b: Objectives and Salient features of Special Economic Zone

The main objectives of SEZ scheme can be briefly stated as:

1. Attract Foreign Direct Investment (FDI)

2. Earn foreign exchange and contribute to exchange rate stability

3. Boost the export sector, especially non traditional exports

4. Create employment opportunities

5. Introduce new technology

6. Develop backward regions

7. Stimulate sectors such as electronics, information technology, R & D, tourism,

infrastructure and human resource development that are regarded as strategically

important to the economy

8. Create backward & forward linkages to increase the output and raise the standard of

local enterprise that supply goods and services to the zone

2.2.c: Salient features of Special economic zones

The Salient features of Special economic zones include

1. No License required for import

2. Manufacturing, trading or services activities allowed

3. Full freedom of subcontracting

4. No routine examination of export import cargo by customs authorities

5. SEZ units to have positive net foreign exchange earner

6. Financial incentives like tax holidays, duty free imports and exports

7. Single window clearance

8. high quality infrastructure

9. Strategic location and market access

Special Economic Zones in India are governed by provisions of Special

Economic Zones Act, 2005 and Special Economic Zones Rules 2006. Up to the end of

March, 2010, 363 private SEZs notified under the SEZ Act, 2005. Currently there are 19

functional SEZs. The SEZ units provide employment to about 1.10 Lakhs persons (out of

which 40% are Females)

Exports:

Year Value (Rs. Crores) Growth Rate

(over previous year )

2004-05 18,314 32%

2005-06 22809 25%

2006-07 34,615 52%

2007-08 66,638 92%

2008-09 99,689 50%

2009-10 42501.76

P a g e | 16



2. 3: Procedure for Setting up the SEZ in India

With in 45 days With in 6Months

Within 60 days

SEZ can be formed in three ways

By Applying to State Govt

By applying to Board of Approval

Central Govt may suo-motto set up and notify SEZ

State Govt forward the Proposal to Board of Approval

Obtain the concurrence of State Govt

After consulting the State Government and identifying the area

Board of Approval approves the proposal

Central Government shall issue letter of Approval to developer

Developer shall furnish to Central Govt information

Central Govt will notify the area as Special Economic Zone

By Applying to State Govt

P a g e | 17



2.4: Concept of Shift and Share Analysis

Shift-share analysis is one way to account for the competitiveness of a region's

industries and to analyze the local economic base. This analysis is primarily used to

decompose exports or employment changes within an economy over a specific period of

time into mutually exclusive factors. It paints a picture of how well the region's current

industries are performing by systematically examining the national, local, and industrial

components of exports or employment change. A shift-share analysis will provide a

dynamic account of total regional exports or employment growth that is attributable to

growth of the national economy, a mix of faster or slower than average growing

industries, and the competitive nature of the local industries.

Like other analytical economic tools, the shift-share technique is only a

descriptive tool. Once completed, the analysis provides a representation of changes in

exports or employment growth or decline, and it is useful for targeting industries that

might offer significant future exports increase or employment opportunities. By

interpreting data provided by shift-share, we can explore the advantages your local area

may enjoy, as well as identify growth, or potential growth industries that are worthy of

further investigation.

SS = NS + IM + RS SS= shift share

NS= National Share

IM=Industrial Mix

RS= Regional Shift

The equations for each components are :

NS = S(t-1)

* ( oNt / oN

(t-1) )

IM = [S(t-1)

* ( iNt / iN

(t-1) ] – NS

RS = S(t-1)

* [ (S(t)

/ S(t-1)

- (iNt / iN

(t-1))]

What do the subscripts, superscripts and the alphabets indicates?

S(t-1)

= total exports of an industry (i) at the beginning of the analysis period (t-1).

S(t)

= total exports of an industry (i) at the end of the analysis period (t).

oN (t-1)

= total exports of the Nation at the beginning of the analysis period (t-1).

oNt = total exports of the Nation at the end of the analysis period (t).

iNt = total exports of the Nationwide in an industry, at the beginning of the analysis

period (t-1)

iN(t-1)

= total exports of the Nationwide in an industry, at the end of the analysis period (t)

P a g e | 18



2.4.a: Components of Regional Industry Exports or Employment Change

As stated above, the shift-share analysis divides the change in local industry

exports into three components.

National growth share - The share of local exports growth that can be attributed

to growth of the national economy. Specifically, if the nation as a whole is

experiencing exports growth, ("a rising tide lifts all boats"), one would expect

total national growth to exert a positive growth influence on the local area. This

factor describes the change that would be expected simply by virtue of the fact

that the local area is part of a changing national economy. In the analysis, we first

examine the national growth share, or the number of exports lost or gained in a

region if total exports in the region had changed at the same rate as overall total

national exports.

Industrial mix - The share of local exports growth that can be attributed to the

region's mix of industries being analyzed. This second factor is the change in a

local industry that would be attributable to the growth or decline of the industry

nationally. This component isolates the fact that nationwide, some industries have

grown faster or slower than others. It represents the contribution that a specific

industry nationally has made to the change in the number of exports in the region.

Local share (Regional shift) - This share of local exports growth describes the

extent to which factors unique to the local area have caused growth or decline in

regional exports of an industrial group. We observe that even during periods of

general prosperity, some regions and still some industries grow faster than others

do. This is usually attributed to some local comparative advantage such as natural

resources, linked industries, or favorable local labor situations. The local

component aids in identifying a local area's economic strengths. This element of

the analysis is a representation of how a region's competitive position can

contribute to regional exports growth. Shift-share, and the local share component

in particular, can point to industries that enjoy local comparative advantage. It

cannot, however identify what the actual comparative advantage is. It is important

to identify what factors have contributed to the local area in outperforming the

nationwide growth. This wide range of factors is very diverse and often includes

elements such as:

a) Local raw materials or local inputs

b) Transportation methods

c) Local wage rates

d) Influence of local industries

e) University influences

f) Local consumption and savings

g) Other comparative advantages

P a g e | 19



It is also important to identify whether the large gainers or losers are basic, or

export industries of your region. These industries are important to your local economy for

job creation. In addition these industries are key to pulling in dollars from outside of the

local region and thus have a "multiplier" effect. By this we mean that these "basic"

industries will generate larger revenues in the long run because they are attracting money

from outside of your workforce area as well as creating new jobs within the region.

2.4.b:Limitations

It should be noted that shift-share is a simple analytical technique and does not

account for many factors. Most notably, it minimizes the impact of issues such as

business cycles, identification of actual comparative advantages, and differences caused

by levels of industrial detail.

A shift-share industrial analysis is a "snap-shot" of 2 particular time frames and

may not give an entirely clear picture of the local, and national economies because the

results are sensitive to the period of time chosen. Shift-share analysis does however offer

a simple, straight forward approach to separating out the national and industrial

contributions from local or regional exports or employment growth.

P a g e | 20



REGRESSION ANALYSIS

In statistics, regression analysis includes any techniques for modeling and

analyzing several variables, when the focus is on the relationship between adependent

variable and one or more independent variables. More specifically, regression analysis

helps one understand how the typical value of the dependent variable changes when any

one of the independent variables is varied, while the other independent variables are held

fixed. Most commonly, regression analysis estimates the conditional expectation of the

dependent variable given the independent variables — that is, the average value of the

dependent variable when the independent variables are held fixed. Less commonly, the

focus is on a quantile, or other location parameter of the conditional distribution of the

dependent variable given the independent variables. In all cases, the estimation target is a

function of the independent variables called the regression function. In regression

analysis, it is also of interest to characterize the variation of the dependent variable

around the regression function, which can be described by a probability distribution.

Regression models involve the following variables:

The unknown parameters denoted as β; this may be a scalar or a vector.

The independent variables, X.

The dependent variable, Y.

In various fields of application, different terminologies are used in place of dependent

and independent variables.

A regression model relates Y to a function of X and β.

The approximation is usually formalized as E(Y | X) = f(X, β). To carry out regression

analysis, the form of the function f must be specified. Sometimes the form of this function is

based on knowledge about the relationship between Y and X that does not rely on the data.

If no such knowledge is available, a flexible or convenient form for f is chosen.

LINEAR PROGRAMMING MODELS:

Linear programming (LP) is a mathematical method for determining a way to

achieve the best outcome (such as maximum profit or lowest cost) in a

given mathematical model for some list of requirements represented as linear

relationships. Linear programming is a specific case of mathematical programming.

More formally, linear programming is a technique for the optimization of

a linear objective function, subject to linear equality and linear inequality constraints.

http://en.wikipedia.org/wiki/List_of_fields_of_application_of_statistics

http://en.wikipedia.org/wiki/Dependent_and_independent_variables

http://en.wikipedia.org/wiki/Dependent_and_independent_variables

http://en.wikipedia.org/wiki/Mathematical_model

http://en.wikipedia.org/wiki/Mathematical_programming

http://en.wikipedia.org/wiki/Optimization_(mathematics)

http://en.wikipedia.org/wiki/Linear

http://en.wikipedia.org/wiki/Objective_function

http://en.wikipedia.org/wiki/Linear_equality

http://en.wikipedia.org/wiki/Linear_inequality

http://en.wikipedia.org/wiki/Constraint_(mathematics)

P a g e | 21



Given a polytope and a real-valued affine function defined on this polytope, a linear

programming method will find a point on the polytope where this function has the

smallest (or largest) value if such point exists, by searching through the polytope vertices.

Linear programs are problems that can be expressed in canonical form:

where x represents the vector of variables (to be determined), c and b are vectors of

(known) coefficients and A is a (known) matrix of coefficients. The expression to be

maximized or minimized is called the objective function (cTx in this case). The

equations Ax ≤ b are the constraints which specify a convex polytope over which the

objective function is to be optimized. (In this context, two vectors

are comparable when every entry in one is less-than or equal-to the corresponding

entry in the other. Otherwise, they are incomparable.)

Linear programming can be applied to various fields of study. It is used most

extensively in business and economics, but can also be utilized for some engineering

problems. Industries that use linear programming models include transportation,

energy, telecommunications, and manufacturing. It has proved useful in modeling

diverse types of problems in planning, routing, scheduling, assignment, and design.

http://en.wikipedia.org/wiki/Polytope

http://en.wikipedia.org/wiki/Real_number

http://en.wikipedia.org/wiki/Affine_function

http://en.wikipedia.org/wiki/Canonical_form

http://en.wikipedia.org/wiki/Vector_space

http://en.wikipedia.org/wiki/Matrix_(mathematics)

http://en.wikipedia.org/wiki/Convex_polytope

http://en.wikipedia.org/wiki/Comparability

http://en.wikipedia.org/wiki/Assignment_problem

P a g e | 22



CHAPTER 3: CASE STUDIES AND UDPFI GUIDELINES

3.1 : CASE STUDIES OF VSEZ & FALTA SEZ

3.1.a: Case Study of Visakhapatnam Special Economic Zone: (primary source)

SEZs have contributed to the growth and development of the Indian economy in

terms of exports, employment and investments. It is the key growth driver of nation‘s

economy and has made the country globally competitive. There are 73 SEZs in Andhra

Pradesh, covering an area of approximately 27,722 hectares. Andhra Pradesh owns one

functional SEZ, Visakhapatnam SEZ, covering an area of 536.54 hectares.

Fig 1: Aerial view of VSEZ -Duvvada

Findings from the Literature Case studies:

The success of the SEZs attributes to the following factors.

a) Strategic Location

b) Multi modal connectivity

c) Bigger size and multiple productivity

d) Provision of infrastructure facilities in processing as well as in non processing area -

(Social Infrastructure)

e) Liberal Economic policies and incentive packages

f) Proper planning and management

g) Administrative framework

h) Flexible Labour laws

i) Export performance and Total investments

The issues have been identified based on the above factors and these issues were studied

for the VSEZ

P a g e | 23



Identified Issues for the study

Based on the literature case studies the issues have been classified in to 7 major issues.

Physical Issues: Location and Accessibility, Size of SEZ, Connectivity, Industry Focus

and Infrastructure Facilities in processing Area

Social Issues: Infrastructure facilities in non processing area(Social Infrastructure),

employment, quality of life of workers, Labour laws and regulations

Economical Issues: Export/Import Performance, industry growth and investment

Environmental Issues: Environment Regulations, Provisions to protect

environment(environmental Infrastructure)

Spatial Issues: Socio-economic characteristics of the city, Growth of the city, Land use

pattern

Governmental Issues: Policy framework, Administrative set up and Fiscal Incentives

Planning and Construction Issues: Planning of infrastructure facilities, Land use,

Policy issues, Environmental considerations.

.

3.1.A: Physical Issues

Mode of Transportation for Import/Export Road and port are the two modes used maximum for import and export. Though the

Gangavaram port is nearby the zone, the industries prefer Visakhapatnam port for import

and export. Because of the lower draught, it cannot accommodate large vessels and

Gangavaram port is not in full operation.

Physical Infrastructure facilities There is a no scarcity of water supply. So the units have to purchase water from VSEZ

and payment will be done as per the usage which is measured by the standard water

meter. Garment and chemical industries are facing maximum price due to excess water

supply. Existing drainage system is poor which needs to be upgraded. Non trade effluent

waste is discharged through the drainage. There is no separate drainage for chemical

industries. The satisfaction level of power and telecommunication is very high, for

transportation it is high but utilities it is bad.

P a g e | 24



Fig 2: Free trade warehouse zone Fig 3: Standard Design Factory

3.1.B: Social issues

Social Infrastructure facilities The Visakhapatnam SEZ lacks in providing social infrastructure. The housing colony is

not provided either for the administration staff nor for the employees. There is no

provision of other social infrastructure such as hospitals, schools, commercial facilities

within the zone. The satisfaction level for social facilities is average.

Employment Generation There is an increase in the employment after 2002 which is one of the successes of the

VSEZ. Out of total, 40 to 45% is the female employment. Engineering units give

maximum employment to skilled and semi skilled workers. These units also provide good

training facilities for the workers.

Primary Survey of Workers The workers are classified in three categories namely skilled, semi skilled and unskilled.

The survey results show that semi skilled and unskilled workers are predominant in all

types of industries. The maximum workers are of age more than 30. No child labour is

engaged in any of the industries.

Working conditions Mostly the workers are working hours are 6 to 10 hours a day. Unskilled and semi skilled

workers are paid on daily basis as per working hours. One of the adverse problems that

the workers are facing is frequent unavailability transportation. The wages are given as

per the Minimum Wage Act. The working condition in SEZ is an indicator to assess

social impact on the lives of workers. For maximum workers, the working conditions are

average. Majority of the workers are satisfied with what they have in terms of salary as

they are paid as per their work but there are no infrastructure facilities for them.

3.1.C: Environmental Issues There is no common effluent treatment plant in the zone. So all the units dispose of the

waste and scrap in the dumping yard and then it is transported for further process. All the

P a g e | 25



units have approval of APPCB and the type of waste and pollutants that each industries

produces are within APPCB limit.

3.1.D: Governmental Issues VSEZ administration offers an export friendly environment through simplified

procedures to provide a single window clearance system Though there is a facility of

single window clearance from the central and state level approvals, 55% of the industries

are facing problems regarding single window clearance. There are long delays in

decisions by the officials at the time of pre establishment services

3.1.E: Planning of Infrastructure facilities The infrastructure in the Visakhapatnam SEZ area has been provided keeping the various

planning principles of sustainability, resource conservation and to provide state-of-the art

infrastructure.

F Fig 4: Aerial View of the VSEZ with Road connectivity

Drainage: No proper drainage facilities are provided.

Water: Abundant and good quality water is made available from a nearby reservoir.

Besides, adequate alternate arrangements have also been made for supply of ground

water. The charges are Rs.40/- per KL.

Power: A dedicated 132/33 KV sub-station. The tariff for power is as per the rates

prescribed by the A.P. Transco from time to time..

Telecommunication: The Department of Telecommunications will be requested to

provide with a 200MB-bandwidth connection with connections using fiber-optic cables.

Social infrastructure: This is provided to serve the population at different level, viz. at

the City Level, Zonal level and the Layout Plan Level. In the present case, Social

Infrastructure is to be provided to serve a population of 3,00,000 at City Level; for

1,00,000 population at the Zonal Plan Level and 15,000 population at the Layout Plan

Level.

P a g e | 26



3.1.F: Impact Analysis of VSEZ

VSEZ is responsible for three major success factors Employment Generation and

employment for females, Revenue Generation for Government and earning foreign

exchange. Land, labours and raw materials are easily available because of the Strategic

location of VSEZ. It also has multimodal connectivity so there is convenient

transportation of goods and services. The multiple industries have more investment. The

administration is export friendly which have increased the opportunities of investment.

The Zone doesn‘t provide adequate infrastructure facilities and it lacks in providing

social infrastructure. Environment monitoring is also very poor which has lead to

environment degradation in the surrounding region. Environmental regional planning is

such that it unlikely pose any threat to the ecological sensitive area. There is protection of

environment by provision of wind breaks, water recycling and STP, CETP and green

shelters at required locations. Efficiencies of operations would be improved and there are

chances of more investment because of sufficient supply of physical infrastructure

facilities. The social infrastructure and townships would give better quality of life and

living standards to the employees. The only negative impact that the VSEZ possesses is

large size that needs acquisition of large piece of land. The land acquisition and land

leveling process may change the hydrology pattern and drainage and may create pollution

during process of land clearing.

3.1.G: Recommendations

Impact at local level is more than at regional level. But this impact can be kept

under control by improving in zone infrastructure, developing social amenities and

providing proper environmental management systems.

• Certain guidelines should be prepared for collection and disposal of the waste.

• There is a foremost need to develop a secure landfill site in zone for disposal of scrap.

• There is no green belt in Visakhapatnam special economic zone as of now; 30 m will be

kept for green belt on all sides of zone as per the guidelines.

• Development of SEZs needs to be integrated with existing Master Plans and Regional

Plans. There is need to develop regional/sub regional plan around the SEZ areas. Here,

State Town and Country Planning/Urban Development Authority should play a key role

P a g e | 27



3.2 A case study on Falta Special Economic Zone: (secondary source)

FSEZ – a regional special economic zonefor creative export processing

opportunities. The SEZ at Falta was identified just south off the metropolitan boundary

and planned to be a strategic trade Zone. The plan was activated by the joint collaboration

of state level organizations like WBIIDC (West Bengal Industrial Infrastructure

Development corporation) and an apex national body – the ministry of commerce,

Government of India.

FSEZ had been conceived as a nodal point of “circulative economic” within the

region planned in four sectors each having diversified production opportunities utilizing

KMR‘s existing intellectual and natural capitals. With FSEZ trade opportunities are now

linked to an emerging South Asian economy.

The master plan of Falta SEZ has three main sectors of establishment of which

sector I and II includes Standard design factories, production centers; Sector III includes

facility centers, laborer housing etc and Sector IV includes housing for the expert groups

and other.

Fig 5: Riverside view from falta SEZ Fig 6: Standard design factory, Falta Sez

Falta EPZ has now become Falta Special Economic Zone and has come under the

purview of the SEZ Act & Rules with effect from 10th

February , 2006.

Infrastructure Facility available in Falta SEZ.

a) Gross area 280 acres(acquired 87 acres and transferred from CPT 193 acres).

b) Location – Panchayat area.

c) Area Development – 253acres (full infrastructural facilities)

d) Area under development – 27 acres.

e) Built- up space – SDF- 15570sq.m. (2 NO‘s) – fully allotted.

P a g e | 28



f) Industrial shed – 15350 sq.m. (7 no‘s) – fully allotted.

g) Internal road – 11 kms.

h) Under construction – 5 kms.

i) Capacity for water supply - About 1 million litres per day with drainage facilities.

j) Electric Sub- station for dedicated power supply for all categories, supplemented by

local sub - station.

k) Electronic Weigh bridge.

Social And Economic Infrastructure

a) Post office including courier services

b) Telephone exchange

c) Residential Accommodation

d) Staff quarter – 44 no‘s available for employees of the units.

e) ESI medical dispensary

f) Bank branches - 1

g) Fire station building

h) Container handling jetty – capacity 56 containers ( 20TEUs) per hour.

i) Community Polytechnic for skill development and training.

P a g e | 29



3.3: UDPFI GUIDELINES FOR INFRASTRUCTURAL FACILITIES

Norms and standards

Distribution

of land use

Infrastructure

Commercial

facilities

Recreational

facilities

Traffic and

Transportatio

n

a) Developed area

average densities

b) Work force

c) Proposed land use

structure of urban

centres in plain

area

d) Proposed land use

structure in hill

town

a) Informal activities

b) Distribution of

activities

c) Hierarchy of

commercial centres

d) Area of commercial

e) Distribution of

shops centres

a) Recreational

facilities

b) Socio-

Cultural

facilities

a) Bus & truck

terminals

b) Classification of

Urban roads

c) Design standards of

Urban roads roads

d) Passenger car units

e) Design service

volume

f) parking

g)

Physical infrastructure

a) Water Supply

b) Water Requirements

for institutional

buildings

c) Sewage

d) Drainage

e) Electricity

f) Solid waste Disposal

Social infrastructure

a) Educational facilities

b) Health care facilities

c) Socio- Cultural

facilities

d) Distribution services

e) Police

f) Fire

P a g e | 30



DISTRIBUTION OF LAND USE:-

Settlement type Persons per Hectare(pph) in

` Plain areas Hill areas

Small town

Medium Town

Large Town

Metro cities

75-125

100-150

100-150

125-175

45-75

60-90

60-90

-

Tab: 1

Work Force and Proposed Land use structure of Urban Centres in Plain areas

Tab :2

Tab: 3

Land use category Percentage of developed area

Small Medium Large cities Metro cities

Residential 45-50 40-45 35-40 35-40

Commercial 2-3 3-4 4-5 4-5

Industrial 8-10 8-108-10 10-12 12-14

Pub& Semi-Public 6-8 10-12 12-14 14-16

Recreational 12-14 18-20 18-20 20-25

Transport & Communication 10-12 12-14 12-14 15-18

Agriculture & Water bodies balance balance balance balance

Work force participation 33% of total population

Industrial workers (%) of total work force

Small and medium town 20 Large cities 25

P a g e | 31



INFRASTRUCTURE :

• Infrastructure is the basic requirement of urban life.

• The extent and the nature of problems faced by different towns vary by size, geographical

conditions, local natural resources, etc.

Physical Infrastructure:-Size of town

Aspect Small Medium Large and Metro

Domestic

1. Absolute Min.

2. Desirable

70 lpcd

100 lpcd

70-100 lpcd

135-150 lpcd

135 lpcd

135-150 lpcd

Non- Domestic

Fire fighting

Public purpose

1% of total demand

10-15 lpcd

20-25 lpcd 30-35 lpcd

Tab:4:

Water requirements for institutional buildings

Institutions Litres per head per day

Hospital

a. No. of beds exceeding 100

b. No. of beds not exceeding 100

450 per bed

340 per bed

Hotels 180 per bed

Hostels 135

Nurses homes & medical quarters 135

Boarding schools/ colleges 135

Restaurants 70 per seat

Airports & Sea ports 70

Junctions stations & intermediate stations 70

Terminal Stations & Intermediate stations 45

Day schools/ colleges 45

Offices & factories 45

P a g e | 32



Cinema, concert halls and theatres 15

Tab :5:

SEWERAGE:

a) The treatment of sewerage is essential to check the decay in the environment as well

as to provide hygienic conditions for the population

b) The sewerage is estimated at the rate of 80% of the water supply in any area.

c) The newly developed areas shall be considered for the provision of community level

septic tanks based on economic & environmental considerations.

d) The squatter settlements may be provided with a facility of 1 toilet for 4 to 5

families based on the concept of low cost and low water consumption

DRAINAGE:

a) The drainage system for any city/town is governed mainly by natural course and

topography.

b) The discharge is calculated that guides the requirements for provision of additional

drain as well as upgradation of existing drains.

ELECTRICITY:

a) According to Master plan of Delhi power supply consumption works out to be

about 2 KW per household at the city level and includes domestic, commercial ,

industrial and other requirements.

b) The provision of 1 electric sub station of 11 KV for a population of 15,000 is

recommended for towns/ cities.

SOLID WASTE DISPOSAL:

a) The insufficient conservancy services in most of the urban

centers tend to leave the garbage spread on the road sides or open spaces leading

to unhygienic conditions.

b) The garbage is removed by the municipal bodies and dumped at

the sanitary landfill or in some cases it is converted to compost esp. in small

towns.

c) The generation of waste varies from about over a quarter of Kg

in small towns to about half a kg per capita in large and metro cities

P a g e | 33



Educational facilities:- ( Area )

Pre-primary to Secondary Education: 1.6 ha

Higher education 4 ha

Technical education 10ha

Health Care Facilities:

General hospital 500 BEDS

(Hospital for 2.5 lakh population capacity)

Area for hospital 4 ha

Area for residential accommodation 2ha

Total area 6ha

Socio-Cultural facilities:

a) Community room

1 for 5,000 population area

660 Sq..m

b) Community hall and library

1 for 15,000 population area

2000 sq.m

c) Recreational club

1 for 1 lakh population area

10,000 sq.m

d) music, dance and drama centre

1 for 1 lakh population – area

1,000 sq.m

e) Meditation and spiritual centre

1 for lakh population area

5000 sq.m

f) socio-cultural centre

1 for 10 lakh population area

15 ha

Tab:6

Police:

Police station 1 for 90,000 population 1.5 ha

Area inclusive of essential residential accommodation 0.05 ha additional to be provided

for civil Defence and home guards

P a g e | 34



Fire:

Tab: 7:

Commercial Activity:

Hierarchy of an urban centres is a function of the hierarchy of planning units in an urban

centre

Tab:8:

Area /1000 persons sq.m. No. Of shops

Cluster centre 220 1 for 110 persons

Sector centre 300 1 for 200 persons

Community centre 500 1 for 200 persons

District centre 880 1 for 300 persons

Tab:9:

1. 1 fire station or sub fire station within

1 for 3 km to be provided for 2 lakh

population

2. Area for fire station with essential

residential accommodation

1 ha

0.60 ha

Planning

unit

Population Served Hierarchy of commercial centre

Cluster 1000-4000 Cluster centre

Sector 5000-20000 Sector centre

Community 25000-100000 Community centre

District 125000-500000 District centre

Sub-city 25 lakh- 50 lakh Sub- city centre

City 50 lakh + City centre

P a g e | 35



Norms for informal activities:

Retail trade No. of informal commercial units

Central Business District

Sub- central Business District

District centre

Community centre

Convenience shopping centre

3 to 4 units per 10 formal shops as specified in

the norms separately

Government and commercial

offices

5 to 6 units per 1000 employees

Wholesale trade and freight

complexes

3-4 units per 10 formal shops

Hospital 3-4 units per 100 beds

Bus terminal 1 unit per two bus bays

Schools

Primary

Secondary/senior

Secondary/integrated

3-4 units

5-6 units

Residential 1 unit/1000 population

Industrial 5-6 units per 1000 employees

Tab:10:

Recreational Facilities

Planning unit Area in Sq.m per person

Housing cluster 3-4 local parks and playgrounds

Sector 3-4 local park and playgrounds

community 2-3 community level park and open space

District 1 district level park and sports centre, maidan

Sub city centre 1 city level park, sports complex, botanical /zoological garden , maidan

Overall town/ city

level

10 sq.m- 12 sq.m per person

Tab:11:

P a g e | 36



Socio- cultural facilities

Community hall : House cluster level

The small parks /open spaces should also be developed with the community hall to suit the

cultural and behavioral needs of the society

Local

community

centre

Sector level

Recreation

club

One for 15000 population 2,000 sq.m

One for 50,000 population 0.5 ha

One for 100000 population 1 ha

Music, dance,

drama centre

One for 50,000 population

Meditation

and spiritual

centre

One for 50000 population

Socio-cultural

centre

One for 5 lakh population

Tab:12:

Miscellaneous Facilities

Dhobi ghat:one site for 1 lakh population with appropriate

arrangements for water and drainage facilities.

Taxi stands/ bus stops/ Rickshaw stands:

The taxi stands/bus stops shall be provided with the following

considerations:

• These should not be located near the road intersections

• The maximum distance of such facilities should not exceed 0.5 km from the

farthest point in any residential area.

Telecommunication: Communication- 10 lines per 100

population.

• Fire- one fire station for 2 lakh population within 1 to 3 km distance.

• Postal services- one post office for 10-15 thousand population.

P a g e | 37



Parking:

Tab:13:

Flats :-

- one space for every two flats of 50-90 q.m or more of floor area

- one space for every flat of 100 sq.m or more of floor area

- For all kinds of developments excepting residential, warehouses and Godown.

- One berth for initial 500-1500 sq.m of floor area. Additional berths at the rate of

one for every subsequent 1000 sq.m or part thereof.

1. For warehouses and Godowns

2. Two berths for initial 500-1500m of floor area. Additional berths at the rate of

one for every subsequent 500m or part of.

The minimum parking space requirements for each car and truck is :

Car : 3m X 6m ( when individual parking space is required)

2.5m X 5m ( when community parking space is required)

Truck : 3.75 m X 7.5m

Residential

1. Detached, semi-detached and row houses

2. Plot area upto 100 Sq.m – no private or community parking space

3. Plot area:101-200 sq.m –only community parking space

4. Plot area:301-500 sq.m- minimum 1/3 of open area for parking

5. Plot area :501-1000 sq.m- minimum 1/4th

of open area for parking

6. Plot area: 1001sq.m +- minimum 1/6of space area for parking

P a g e | 38



Break up area for Frieght Movements:

Tab:14:

Use Percentage area

Transport operators

Broad land use break up in truck terminal:-

- office, godown, loading/unloading

30

Service industry

- petrol pump, service area, weigh bridge, etc

6

Public/semi-public

- Police post, post office, telephone, first aid etc.

3

Commercial 3

Parking- idle, transits, other vehicles 10

Open spaces 10

Circulation 28

Others 2

P a g e | 39



CHAPTER 4: DATA FRAMEWORK AND DATA ANALYSIS

4.1: Data Collection:

This project is based upon both the primary data and secondary data. The primary

data was collected through the personal interviews of officials and experts, the Exports

and Imports of the manufacturing industries in India as well as Andhra Pradesh. For this

purpose a general socio – economic and expert opinion survey was done and the result of

the opinion and data collected helped in doing the analysis. The secondary data has been

collected from research paper and through the various organization websites. The primary

data includes the case study of Falta SEZ, and employment data of various industries.

4.1.1 Primary data.

To better understand the economic condition and present manufacturing industries in

Andhra Pradesh regarding the Special Economic Zone expert opiion survey was

conducted to get the view of the experts over the need of SEZ.

Objective of the primary survey is to gather information about;

Existing economic condition of the zones

Requirements of the Infrastructure facilities for the Special Economic Zone

Probable advantage or disadvantages of the project

4.2 Tools and techniques required for analysis

OBJECTIVE 1: To identify the leading and lagging Industries in the state of Andhra

Pradesh

Shift and Share Analysis is the tool used to find out the leading and lagging

manufacturing industries, for this the main primary data required is the Exports and

Import of the different manufacturing industries within India and Andhra Pradesh way

back from the period of 2005-2010.

OBJECTIVE 2: To analyze the optimum area required for the Zones or Industries

selected.

Regression Analysis and Linear Programming model is used to calculate the Optimum

area of the zones and also the tota number of Population or employee can be calculated

with the weighted average method of each industries employees with optimum area.

P a g e | 40



Date Analysis

Share and Share Analysis Technique: This is the technique used to find out the

Leading and Lagging Industries at any place by location quotient technique. Using result

of the Regional shift (RS), the higher the value of RS, will be the leading industry, and

lower the value will be the Lagging Industry. The procedure to calculate the value is give

by the following steps.

SS = NS + IM + RS SS= shift share

NS= National Share

IM=Industrial Mix

RS= Regional Shift

The equations for each components are :

NS = S(t-1)

* ( oNt / oN

(t-1) )

IM = [S(t-1)

* ( iNt / iN

(t-1) ] – NS

RS = S(t-1)

* [ (S(t)

/ S(t-1)

- (iNt / iN

(t-1))]

What do the subscripts, superscripts and the alphabets indicates?

S(t-1)

= total exports of an industry (i) at the beginning of the analysis period (t-1).

S(t)

= total exports of an industry (i) at the end of the analysis period (t).

oN (t-1)

= total exports of the Nation at the beginning of the analysis period (t-1).

oNt = total exports of the Nation at the end of the analysis period (t).

iNt = total exports of the Nationwide in an industry, at the beginning of the analysis

period (t-1)

iN(t-1)

= total exports of the Nationwide in an industry, at the end of the analysis period (t)

Tab: 15: Data of the Exports of the various Industries (2005-2010)

P a g e | 41



The data indicates that—over a five year period—2442.96 textile manufacturing exports

were created in the state; 418.104crs exports were created in the state‘s Transport

equipments manufacturing industry; overall, 47999.8413crs manufacturing exports were

created in the state. How much of this growth may be attributed to the unique Andhra

Pradesh business climate? In other words, since an industry‘s local performance is

affected by fluctuations in the national business cycle and by its national performance,

external forces need to be subtracted. Thus, to identify the local economy‘s leading and

lagging industries, we apply the shift and share calculations previously described.

Tab:16: Results of Regional Shift

Interpreting the Data Analysis In 2005, nearly 401.277 billion were exported in the state‘s manufacturing industries.

Five years later, 881.27 billion were exported in the industry. How much of that

increase may be attributed to the national economy?

881.27 = 563.58 + 188.57 + 129.11

Actual NS IM RS

National Share (NS): Had the state‘s manufacturing industry grown at the same rate as

the national average, there would have been 31,788.61crs less exports in 2010. So, what

explains the gain of 16211.2245crs jobs in the state‘s share of national employment? Was

there something unique about the industry itself?

Industry Mix (IM): There is usually a difference between a particular industry‘s growth

rate and the national average. The exports data show that, nationally, manufacturing

exports increased with overall exports increased. Had Andhra pradesh manufacturing

P a g e | 42



grown at the same rate as the national manufacturing industry, the state would have

complex. Since it did not, it is fair to say that Andhra Pradesh provided a better

environment for manufacturing between 2005 and 2010.

Regional Shift (RS): The difference between the national share and industry mix is the

regional shift. The regional shift indicates that local conditions were responsible for the

state‘s competitive position in manufacturing. The RS column in the data analysis table

shows.

Top 5 Leading Manufacturing Industries (2005-2010)

Information Technology / BPO services

Gems and Jewellery industries

Textile industries

Pharmaceuticals

Food Processing

Top 4 Lagging Manufacturing Industries (2005 - 2010)

Transport equipments

Leather Industry

Chemical industry and

Electronic goods manufacturing industry

The results clearly indicate that the Andhra Pradesh manufacturing industry

outperformed its national counterpart during the expansionary period, 2005-2010. Based

on the identification of leading and lagging industries, this analysis suggests that

manufacturing export efforts—at least in good economic times— should be directed at

bringing more Information technology/BPO service companies and Textile companies to

the state.

P a g e | 43



REGRESSION ANALYSIS FOR THE SELECTED SECTOR:

Regression analysis for the sector selected is done with the present data which

includes employments, number of units in the SEZ, total area of the SEZ.

Final estimated optimal area for IT & ITES are calculated as below with the Regression

analysis

Regression models involve the following variables:

The unknown parameters denoted as β; this may be a scalar or a vector.

The independent variables, X & Z. ( Employment and No of Units).

The dependent variable, Y. (Area required)

A regression model relates Y to a function of X, Z and β.

Formulating the data in the Excel sheet in the following manner as shown in the figure below for

each sector selected from Shift and Share Analysis

Tab:17: Excel Sheet explains the procedure for calculating the Equation for IT&ITES.

P a g e | 44



Tab:18: Excel Sheet explains the procedure for calculating the Equation for

Pharmaceuticals.

Tab:19: Excel Sheet explains the procedure for calculating the Equation for Textile

Industries

Final output from the Regression analysis is the three equations which will be help

full in solving the Optimal area problem using the Linear Programming Model.

Tab:20: Regression equations for selected sectors

P a g e | 45



Final optimal area of the proposed Hyderabad special economic zone:

Tab:21: Optimized area and employment details of each Sector

P a g e | 46



CHAPTER 6: PROPOSED SITE LOCATION FOR HYDERABAD

SPECIAL ECONOMIC ZONE

6.1 SITE LOCATION:

GENERAL

The main objective of the site location process is to provide the best possible site for

the proposed Special Economic Zone Hyderabad which would serve the purpose of

developing the area to boost economic growth, provide strong forward and

backward linkages and facilitate development of other projects in the area.

SITE SELECTION CRITERIA

Multi criteria approach is used for selecting the site based on venous factors influencing

the site, the criteria identified for the selection of the site are listed below.

1. Compatibility with the Draft Master Plan 2021 and other proposal with

respect to road network, rail network.

2. Availability of acquired land of minimum area of 1000 Ha. (Approximately).

3. Suitable site terrain and topography.

4. Rail connectivity.

5. Road connectivity – Location on the Sri Sailam Expressway.

6. Proximity to proposed International Airport.

7. Area should be devoid of places of archaeological and historical importance.

8. Area should be devoid of Inversion effect (presence of hillocks, ‗which prevent

dispersion of wind).

9. Area should be devoid of rare and endangered species.

10. Site slope and drainage pattern.

11. Availability of skilled manpower.

12. Availability of social infrastructure.

13. Area devoid of floods.

P a g e | 47



14. Availability of public utilities like water supply, sewerage, drainage and power

supply etc

DESCRIPTION OF THE SITE:

The total area identified is approximately 1000 Hectares. This proposed site is

identified and exact location of the site is shown in the fig. The area is selected along the

Sri Sailam Highway, National Highway - 9 due to easy accessibility from Hyderabad.

The area is sparsely populated. Few village settlements are spread over the area at every 2

- 3 kms distances from each other. The present land use of the area is agricultural(45%).

The water level in the area is about 5- 10 m below ground level.

The site is part of the integrated industrial town of Hyderabad and the site is nearest

major settlement to the proposed site is, Greater Hyderabad town. The wind direction

prevailing in the area is towards southeast. The skilled manpower requirement can be met

by the large number of institutions already existing in Hyderabad, Greater Hyderabad and

in the Andhra Pradesh Region.

CONCEPT DEVELOPMENT FOR THE MASTER PLAN

I. High speed road connectivity to the proposed airport site through the

Srisailam Highway, National Highway -9.

II. Good proposed Rail link from Hyderabad, Vijayawada and Visakhapatnam.

III. Development of special economic zone as a contiguous development along

IV. the Expressway corridor.

V. Fast access to the major tourist destinations in and around Greater

Hyderabad city and other southern destinations.

VI. Development of inland container terminal to fulfill the transport

requirements by all modes. Thus the concept of multi-modality.

VII. Development of truck terminal facility to facilitate road freight transport.

VIII. Development of residential area for the employees of SEZ.

IX. Availability of land for future expansion.

X. Development of concept within the SEZ Hyderabad to exploit the potential

of the region to act as transit point for international and national traffic and

provide multi modal connectivity to the sector establishing in the HSEZ.

P a g e | 48



PROJECT AREA PROFILE-SPECIAL ECONOMIC ZONE

Project location

Hyderabad Special Economic Zone is proposed to be located in district

RangaReddy of AP within the planned township of Hyderabad Airport

Development Authority(HADA) as shown in fig. It is situated near Outer Ring of

greater Hyderabad which is the most developed part of AP. The size of the zone

has presently been set at 1000 ha.

Resources

The region is endowed with adequate water resources . The main source of surface

water in the region is rivers, canals and lakes. The bulk requirement of water in the

region is met by rivers Krishna and Godavari . The quality of water is considered

very well. As regards the ground water resources 85% of the annual precipitation

occurs during monsoon months. The general water table ranges between 6 to 15

meters below the ground level. Due to the mounting pressure of population and

extensive cultivation, very little has been left of the natural vegetation . The area

has dry deciduous trees.

Infrastructure Facilities

The region is well endowed in all social infrastructures like Education, Medical,

Water supply, Post and Telegraph, Communication and Road connectivity etc.

The region receives power from the integrated grid of APCPDCIL.

P a g e | 49



Fig: Proposed Site Location for Hyderabad Special Economic Zone

6.2 Concept of Special Economic Zone design

Design concept 1:

Strengths: 1: Distribution is prefect in both zones

2: Allocation of Units in Processing and zones like commercial, recreational and

residential zones in Non Processing zones are easy

3: Trading can be done easily in Processing zones.

4: Non Processing zone is almost free from pollution.

5: Can be able to shift the line towards the Non Processing area if there is huge demand

of Units coming in SEZ.

Weakness: 1: Rate of trading decrease in peak timing due to congestion in Processing zone.

2: Worker have to travel from one zone to other (Extremes).

Design concept 2:

Strengths: 1: Distribution of workers is easy.

2: Land usage for commercial, recreational and residential is separate.

3: Separate zone helps for environmental issues.

4: Industrial sectors wise allocation can be done.

P a g e | 50



Weakness: 1: Cost increase for complete development of 2 zones ( Processing and Non- Processing).

2: Increases traffic problems at junctions.

Design concept 3:




4: Travel time for workers becomes less.

Weakness: 1: Cost increase for complete development of 2 zones ( Processing and Non- Processing).

2: Increases traffic problems while trips are generating from Non processing zone 1 to

Non processing zone 2.

3: As advantageous to the industrial allocations but not to non processing zone.

Design concept 4:

Strengths: 1: Distribution is prefect in both zones

2: Allocation of Units in Processing and zones like commercial, recreational and



4: Travel time in the processing and non processing area decreases.

5: Fully security available.

P a g e | 51




Design concept 5:




Weakness: 1: Cost increases for complete development of 2 zones (Processing and Non- Processing).

2: Increases traffic problems while trips are generating from Non processing zone 1 to

Non processing zone 2.

3: Rate of trading decrease in peak timing due to congestion in Processing zone

4: Residents will have a problem of travelling long distance from one NPA -1to other

NPA- 2 (extreme ends) and they have to cross the industrial areas.

Design concept 6:

Strengths: 1: Allocation of Units in Processing and zones like commercial, recreational and



3: Non Processing zone is almost free from pollution.

4: Travel time in the processing and non processing area slightly decreased.


2: Residents will have a problem of travelling long distance from one NPA -1to other

NPA- 2 (extreme ends) and they have to cross the industrial areas.

P a g e | 52



6.3 Selections of Design and Factor involving in the Internal design

1. Optimal Design - 1 is selected from all the above designs due to the flexibility of

shifting the line of Non- Processing zone and Processing Zone and since its

distribution is perfect in term of Road connectivity from the existing point of view

of the proposed location.

2. Depending upon the sound or noise, pollution, accessibility of resources like raw

material availability and man power and the logistics level creating by the

manufacturing sector selected like Textile, Pharmaceuticals, IT&ITEs, Gems and

jewellery, Food processing industries and the non processing zones also.

6.4 Calculation of all the Infrastructural facilities by UDPFI guidelines

From the UDPFI Guidelines mentioned above we can calculate the Infrastructural

facilities like water, power, drainage, sewerage, Telecommunications, Width of

the road, ecological parameters, percentage area per zone or per activity is done

through UDPFI guideline.

For example: Water requirement is given below

Type Population Requirement water per person (

in Litre)

Total (in KL)

Hospital 450 100 45

Restaurants 350 70 24.5

Day schools 1000 45 45

Colleges 500 45 22.5

Offices 9215 45 415

Cinema halls 1500 15 22.5

Industrial Units 15 max (8-14) max in KL 210

Warehouse 2 units 8000 160

Residential 27924 125 3490.5

Other 9215(33%) 125 1151.8

Total - - 5586.8 KL

P a g e | 53



In similar way, calculated area of each zone and road width, percentage of zone including

ecology and many other infrastructural facilities are carry out and resulted in the sheet

shown above as per the UDPFI guidelines.

6.4: A broad outline or layout of the proposed Master plan of Hyderabad SEZ

P a g e | 54



P a g e | 55



Recommendations:

The other units other then prescribed are allowed into the other zone mentioned in the

master plan at the maximum number of 5 with small scale based, due to the

infrastructural miss match in term of facilities.

Other service road can be build up like cargo road toward the Airport for the free transfer

movement of the loads.

Real estates can be developed around the site for the better attraction of the Hyderabad

Special economic zone.

Horticulture can be allowed in the Ecology zone for pure vegetation and cultivation for

the beneficial of the residents in the HSEZ.

Green belt build across the zones are preserved and have to be taken care by the

Administration.

P a g e | 56



References:

i. NOIDA sez master plan

ii. VSEZ.gov.in

iii. http://fsez.nic.in/

iv. http://sezindia.nic.in/index.asp

v. UDPFI guidelines

vi. Concept of planning infrastructure facilities

vii. http://infrastructure.gov.in/pdf/doi.pdf

viii. Economics of development and planning By K.R. Gupta

ix. http://www.rahejasez.com/pdf/sez-gurgoan-brochure.pdf

x. Shift and share: its theory and applications by Richard Arnold Bell

xi. http://www.law.uchicago.edu/files/files/20.Sykes_.Regression.pdf

xii. Optimal portfolios using Linear Programming models - Christos Papahristodoulo

xiii. http://www.apiic.in/

xiv. http://www.mangaloresez.com/r&r.html

xv. http://labourbureau.nic.in/

xvi. http://fsez.nic.in/home.html

http://fsez.nic.in/

http://sezindia.nic.in/index.asp

http://infrastructure.gov.in/pdf/doi.pdf

http://www.rahejasez.com/pdf/sez-gurgoan-brochure.pdf

http://www.google.co.in/search?tbo=p&tbm=bks&q=inauthor:%22Richard+Arnold+Bell%22

http://www.law.uchicago.edu/files/files/20.Sykes_.Regression.pdf

http://www.apiic.in/

http://www.mangaloresez.com/r&r.html

http://labourbureau.nic.in/

http://fsez.nic.in/home.html

P a g e | 57



analysis of infrastructural economic planning for special economic zones

Documents