In particular, several of you were wondering as to what the envisaged benefits of SEZ's were. Here is what this website has to say about this:
"(a) generation of additional economic activity
(b) promotion of exports of goods and services;
(c) promotion of investment from domestic and foreign sources;
(d) creation of employment opportunities;
(e) development of infrastructure facilities;
It is expected that this will trigger a large flow of foreign and domestic investment in SEZs, in infrastructure and productive capacity, leading to generation of additional economic activity and creation of employment opportunities."
As you can see, theoretically SEZ's can potentially confer a multitude of benefits - I think Vijay raised most of these benefits in class today. However the reality can be different. Comments?
Thursday, August 16, 2007
Special Economic Zones (SEZs)
I'm sure you would have enjoyed and learnt a lot from Vijay Sarma's guest lecture today. For those of you who are still thinking of SEZ's this website provides more information at the policy level. Of course you could just google SEZ's to get many more websites with pertinent information.
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51 comments:
True, The (absolute)figures given in the website give us a illusive look that we are progressing well, but to be really successful in the long run, we should try and imitate the Chinese way of the SEZ. i am pasting a link that gives an insight into where we are standing in comparison with our neighbors...
http://www.blonnet.com/bline/2003/05/07/stories/2003050700120900.htm
Regarding the reality aspect in the SEZ's , i have a couple of issues to be posted. In India the following prevail :
1.Exploitation of labourers
2.Women exposed to sexual harassment
3.Loss of revenue for Government
4.Fertile lands being used for setting up of industrial units
in addition to the previous post , the following are the cons of the SEZ'S:
* Significance of Tax break – The overall tax breaks offered will create an estimated loss of Rs. 90,000 crores for the government. Overall, the benefits (5 year tax holiday, additional 5 years at 50% tax break, and additional tax breaks depending on the profits re-invested), are expected to be in the positive, though not substantially more than normal, given that most corporations are offered tax breaks for non-SEZ development as well
* Infrastructure issues for smaller size SEZ – With some single-product SEZs of less than 100 hectares being sanctioned, several critics state that this could result in the SEZ becoming a burden on the surrounding infrastructure instead of creating its own. Experiences from other countries such as China have shown that large SEZs typically fare much better simply by making it easier to create scaled and sustainable infrastructure in the forms of road, power, water etc.
* Land acquisition for SEZs – By far the biggest point of debate has been around the alleged land grabbing by developers from farmers including that of irrigated multi-crop land for the creation of SEZs. In several cases, the amount and mechanism for compensation has been a source of controversy
* Land apportioning within SEZs – Only 25% of land in SEZ can be allocated for industrial development, with the remaining 75% intended for purposes including commercial/residential development. Critics state that this could create a environment where real estate development may become a more important objective for the creation of SEZs
* Labour laws – With the Development Commissioner of an SEZ being delegated all powers related to solving labour disputes, several critics state that the rights of the workers will not be protected.
* Uplifting the local population – With no liability to impart skills to the local population it is debated that this will result in SEZs not creating substantial benefit for the local population, as only skilled labour forces are employed. Furthermore, this could lead to issues due to migration of workers as observed in Shenzhen, China.
The idea of SEZ is great, we are hoping to have better economic growth. but how fair are the compensation packages?? IF packages are fair enough why do we see people opposing??
1.farmers are being given baron waste land snatching fertile land for them.
2.the developer must provide sustainable job to a person nominated by family atleast during the gestation period.
3.the best option as we were discussing in class is to make farmer EQUITY PARTNER.
As usual the govt. is playing a dummy role in these matters. Its ultimately Government's duty to ensure that land losers atleast get what they lose.
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