shortcomings of an sez

8/2/2019 Shortcomings of an SEZ

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6 April 2012 SEZ 1

SEZ - Benefits/ Shortcomings

[Benefits/shortcomings for organizations to be in SEZ and why organizations

want to get out of SEZ (Surat Apparel Park SEZ and Dahej SEZ)]

Prepared by: MIRA J ANAJWALA


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Flow of the Presentation:

SEZ- Overview

Project details-objective, scope

Project details-methodology followed

Analysis/study

Conclusion/Interpretation from Analysis

SuggestionsLearnings & Limitations of Project


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Objectives behind setting up of SEZ:

The main objectives behind setting up of an SEZ policy were

given as under:

Generation of additional economic activity

Promotion of Exports of goods and services

Promotion of investment from domestic and foreign sources

Creating of Employment opportunities

Development of infrastructure facilities

The policy intended to make these SEZs an enginegrowth supported by quality infrastructurecomplemented by an attractive fiscal package withminimum possible regulation


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SEZ Rules Provision:

The SEZ Rules provided for:

Simplified procedures for development, operation, and maintainance of

the Special Economic Zones and for setting up units and conducting

business in SEZs,

Single Window Clearance for setting up of an SEZ,

Single Window Clearance for setting up of a unit in an SEZ,

Single Window Clearance on matters relating to Central as well as State

governments;

Simplified compliance procedures and documentation with an emphasis

on self certification


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Moon Sez Consultants Pvt. Ltd. SEZ-Cenvat and Customs 6

Fiscal Benefits available to SEZ

Cenvat

CustomsVAT

Income Tax

Service Tax

Central Sales tax

Securities

Transaction Tax

Exemptions of

tax ,duties or

cess in 21

Acts

Stamp Duty


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Benefits


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Critical issues of SEZs:

Land Acquisition

Internal Competitiveness of exports

Attracting FDI

Infrastructure Development

Employment

Misuse of land for real estate

Loss of Revenue

Relocation of industries

Employment


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Research Methodology

OUR ACTIVITIES:

Being aware about various activities of GIDC during the Orientation Programme

Prepared Analytical reports based on Survey carried out in Surat Apparel Park SEZ

and Dahej SEZ and making a Comparative analysis to identify the factors

responsible for success or failure of an SEZ, recommend GIDC


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Objective

Literature Study

Data Collection

Data Analysis

Recommendations

and Conclusion

SEZ Theory Government Policy

Primary Data

Collection by way of

Questionnaire method,

Observation

Secondary Data Collection

from various Reports and

other materials

To identify reasons why organizations want to be n SEZ or why

the organizations want to move out of SEZ, SAP SEZ and Dahej

SEZ with respect to the benefits/ shortcomings for an

organization in SEZ

Methodology


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Developed

97 plots

Sold 43 plots

(44%)

Invested

fully/

partially

20 units-47%

8 functional

units at present

(19%)

3 units closed

down recently

1 unit

upcoming/

planning to

start

operation

With the objective ofpromoting the garment/ apparel/ made ups

industry in Gujarat,To utilize local man made fabrics of Surat

and supply it to the big markets and cities in

IndiaAnd also to develop & promote Apparel

exports from Surat

But later on in 2005-06

Surat ApparelPark wasconverted in toapparel Park-SPECIALECONOMICZONES (SAP-

SEZ)

, which changed the direction of

original concept ofApparel Park

Current Status of the Surat Apparel Park- SEZ:Surat Apparel Park was established in 2003-04


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Analysis done from the survey carriedout at SAP SEZ

Type of

Company

Public Privat

e

Othe

r

Number of units

under each type

of company

2 5 1

Size of unit Large Mediu

m

Smal

l

Number of units

under each type

2 2 4

The Company isfrom

India Abroad

Number of units

under each type

of company

7 1

5

21

Public Ltd. Co

Private Ltd. Co

Other

From

India

87%

From

Abroad

13%

AnalysisGeneral Information of the units operating in Surat Apparel park SEZ:-

Sample Size 100%, (surveyed all the Currentlyoperating units in SAP- SEZ)

2 2

4

00.5

11.5

22.5

33.5

44.5

Large

Mediu

mSm

all


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Analysis: SEZs V/S DTA

SR.

No.

Year Drawback

1. 2004 6.80%

2. 2005 6.20%

3. 2006 7%

4. 2007 12%

5. 2008 9%

6. 2009 8%

Accessibility

for Labours /

Suppliers

/Visitors/Guest

s

Highly

Restricted

Open & Free

Movement

In case of SEZ, non-

beneficial for

business & causing

hindrances

DTA

REJECTS &

WASTAGES

HIGHLY

RESTRICTED

LO0SS

MAKING

OPEN & FREE

REVENUE

GENERATING

Procedure to sell off/

dispose off the

rejects & wastages is

impractical

Most of the units

have tons & tons of

wastage lying in their

compounds

DTA


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Quality of Physical and Social Infrastructure at SAP SEZ:

4

3

2

3

4

2

1

2

1

2

0% 20% 40% 60% 80% 100%

water

Electricity

Transportation

very good

good

Average

bad

very bad

16%9%

16%

18%6%

6%

16%

13%

Housing facilty

Clinic

School/colege

Shopping facilty

Multiplaex/recreational

faciltyRestaurant/ canteen

Banking facility

ATM

Post office

STD/ISD


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Suggestions

Observations made from surveying the units at SAP-SEZ:-

Recommendations:

The concept of Special Economic Zone is to bring large dividends to the State in terms of

economic and industrial development and the generation of new employment opportunities.

But as the units are facing the problem of labor. The concept of an SEZ is not working for theSurat Apparel park SEZ. So Government of Gujarat should look into this matter seriously.

The other objective of an SEZ is to attract the Industrialists and entrepreneur to establish

industrial units in the Zone, and for that the State Government has proposed to grant the

various fiscal benefits, But many industrialists who have invested in SAP-SEZ plots, are not

ready to start operation, some of the functioning units have even closed down their units,and there are hardly 10% of total capacity operating in Surat Apparel park SEZ. So this way

also we can say that GIDC has failed to achieve this objective.

The working condition of the units operating in SAP- SEZ is far better as compared to the

units operating in DTAs. Because of the norms that units have to follow the norms related to

labor. So thats a positive sign of SAP-SEZ.


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Survey carried out at Dahej SEZ


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Findings and Suggestions for Dahej SEZ from the Survey

carried out at Dahej SEZ:

Reason behind the success of Dahej SEZ are

The Strategic location and the Connectivity at Dahej SEZ

Speed of infrastructure is growing at a rapid pace mainly because of the

attitude of Government of Gujarat (Business friendly Environment)

About Infrastructural issues:

Gas facility, (GSPL to set up a gas distribution network)

Waste Disposal facility required to dispose off the solid waste

Additional Water Storage facility

DSL should Continue providing such world class infrastructure facility and

also continue with good governance.


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Conclusion/Interpretation from Analysis


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Learning:

Basic knowledge of SEZ,

Experience of Survey carried out for an organization was actually a great learning

experience

(You have to act responsibly when you are representing on behalf of an

organization)

Difficult thing takes long time and Impossible things a little long

How and from where to correct required data, and how to utilize that data

Limitations: The scope of the study is restricted to two SEZs

The limitations of the data collected from primary as well as secondary sources


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THNAK YOU

shortcomings of an sez

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