Special Economic Zones in Pune
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Transcript of Special Economic Zones in Pune
Journey from 90’s to 2010
Pune Then and Now…
Oxford of East to Deemed Universities
Surprisingly Google search gave me Pune 2050
….
Dr. Vikhe Patil Foundation’s Pravara Centre for Management
Research & Development
Research Paper Presentation“Emergence of Tier II Cities in
Maharashtra”By Prasad S. Lagad
Agenda
• Introduction - Maharashtra – Development of Maharashtra, Potential for business & growth• Objectives• Theme of Research• Tier II Cities – Basis of Classification• Pune City – Historic Base, Education, Tourism, Infrastructure• Special Economic Zone – Act, Rules & Regulations, Approvals, Tax benefits, Exemptions, EXIM
Policy• SEZs in Pune – Why Pune city, Reasons for growth• Observations & Findings• Conclusion• Bibliography
Theme for Research
SEZs in PUNE
Tier II Cities in Maharashtra
AURANGABAD
PUNE
NAGPUR
NASIK
Tier II cities – Basis of Classification
• Tier - A relative position or degree of value in a graded group.
• Tier I, II & III – Various criteria such as Real Estate, Infrastructural Development, Size of Population, Income of Population(Inclusive of HRA & CCA).
• Reasons for classification of Tier I, II & III.• Tier II cities in Maharashtra – Aurangabad,
Pune, Nagpur & Nasik.
Reasons to select
• Geographical Location• Historic Base• Educational Hub• Availability of Skilled resources• Scope to explore real estate sector• Infrastructural Developments & Transport
System
Special Economic Zones• Concept :- • Duty free areas with Integrated Infrastructure• High Point – Preferential Policy framework with a package
of incentives• Benefits of local advantages within an international
business environment• Business infrastructure combined with social facilities • Development, Administration and Operation to be
undertaken by private sector to enable a hassle free operating environment
• Envisage as areas of excellence to enable global companies to derive domestic advantages for doing business.
Special Economic Zone• Origin from Industrial Parks to SEZs – 1896• Chinese Experience – 1979-80• Extremely successful Chinese format to
promote exports, attract FDI and foster overall economic growth
• Shenzhen SEZ, started in 1981, has achieved 38% GDP growth. CAGR – the highest economic growth recorded in human history
SEZ Framework
SEZ can be categorized on basis of sector, function or location and required to have processing as well as non processing area.
Types of SEZ
Sector – Specific SEZ
Manufacture one or more goods in
a particular sector.
Render one or more services in
a particular sector
Multi – Product SEZ
Manufacture multiple goods in one sector or
across multiple sectors :-Trading & Warehousing
Render two or more services in a sector or
multiple sectors.
SEZ in port or Airport
SEZ in an existing port or airport for manufacture of goods falling in two or
more sectors or for trading and warehousing or rendering of services.
Minimum Area RequirementSr. No. Type Minimum Area of SEZ
1 Multi Product SEZ 1000 Ha.
2 Multi Services SEZ 100 Ha.
3 Sector Specific SEZ 100 Ha.
4 Port Based 100 Ha.
5 Airport Based 100 Ha.
6 Electronic Hardware & Software including ITES 10 Ha. & min built up area of 1 lakh Sq mt. for IT
7 Bio Technology 10 Ha. & min built up area of 40,000 Sq mt.
8 Gems & Jewellery / Handicraft 10 Ha. & min built up area of 50,000 Sq mt.
9 Non – Conventional Energy including Solar energy equipment cell
10 Ha. & min built up area of 40,000 Sq mt.
10 Free Trade Warehousing Zone 40 Ha. & min built up area of 1 lakh Sq mt.
SEZ Layout
Processing Area
Processing area is the demarcated area in SEZ where units can be located for
manufacture of goods and services Minimum processing area has been
uniformly fixed at 50% 1000 ha – 5000 ha for multi product SEZs
100 ha for product specific SEZs
Non-Processing Area
Non Processing area is intended to provide support facilities to SEZ processing area and may include :
* Educational institutes * Hospitals
* Hotels * Recreation and entertainment
* Residential and business complexes
• SEZ defined in India:- “Specifically delineated duty free enclave and
shall be to be foreign territory for the purposes of trade operations and duties and tariffs”
- EXIM Policy 2000, Chapter 9 Para 30
SEZ :- Indian scenario
• To achieve its three-fold objectives of attracting FDI, increasing exports and accelerating the country’s economic growth the Government of India announced the introduction of Special Economic Zones (SEZs) in it Export-Import Policy of March 2000.
Legal framework for setting up SEZ is defined under SEZ Act and State SEZ Policy
Legal Framework
SEZ Approval• SEZ can be established either by Central or
State government or privately.
• Prescribed form should be submitted for approval to state government, which is forwarded to Board of Approval consisting of (Deputy Secretary, Ministry of Commerce & Industry, Department of Commerce, Udyog Bhavan, New Delhi)
Type Minimum Investment
Net Worth Criteria
Sector Specific 250 cr. 50 cr.
Multi Product 1000 cr. 250 cr.
Procedure of Board of Approval for SEZ
SEZ Status Definition
Formally Approved Given when land is available to set up the SEZ
In Principle Approval Given when the land has not yet been secured but all other criteria are fulfilled
Notified Final stage after which physical development work begins
Maharashtra’s Contribution Approval No of units
Formal Approval 105
In Principle Approval 38
Notified SEZs 63
Contribution in %age compared to whole India
Approval %age
Formal Approval 18.13
In Principle Approval 24.55
Notified SEZs 17.16
Growth of Maharashtra from SEZ IT / ITES
Year Maharashtra State (Rs. In Crores)
2006-07 27625.00
2007-08 35374.00
2008-09 42360.88
Tier II cities ContributionApproval No of units
Formal Approval 42
In Principle Approval 11
Notified SEZs 17
Contribution in %age compared to whole Maharashtra
Approval %age
Formal Approval 20.38
In Principle Approval 05.33
Notified SEZs 08.25
Pune City ContributionApproval No of units
Formal Approval 32
In Principle Approval 05
Notified SEZs 24
Contribution in %age compared to whole Maharashtra
Approval %age
Formal Approval 15.53
In Principle Approval 02.42
Notified SEZs 11.65
Total SEZs Contribution of Pune
Name No
In Maharashtra 206
In Pune 61
Percentage 29.61 %
SEZ : Sector-wise Contribution (Pune)Sector Formal
ApprovalIn Principle Approval
Notified Approval
Aluminum 0 0 0
Automobile 0 1 0
Biotechnology 2 0 1
Electronic Hardware & Software 4 0 3
Engineering 2 1 0
Gems & Jewellery 0 0 0
IT / ITES 19 1 18
Multi-Product 1 2 0
Multi-Services 1 0 0
Pharmaceutical 1 0 2
Research & Development 1 0 0
Textile 1 0 0
6%13%
6%
59%
3%3
%
3%3% 3%
Formal Approval
Aluminum Automobile Biotechnology Electronic Hardware &
Software Engineering Gems & JewelleryIT / ITES Multi-ProductMulti-Services PharmaceuticalResearch & Development Textile
In Principle Approval
Aluminum Automobile Biotechnology Electronic Hardware &
Software Engineering Gems & JewelleryIT / ITES Multi-ProductMulti-Services PharmaceuticalResearch & Development Textile
Growth from SEZ IT / ITES Export
Growth in Operating & Exporting Units
SEZ Facts
SEZ Facts• Total Investment made inclusive of Foreign
Direct Investment (FDI) up to 31. 03. 2008 is Rs. 1578.43 Crores in Pune.
• Employment Created:- Direct Employment – 20,274 Employees (Men-14908 & Women-5366) Indirect Employment – 30,509 Employees in Pune.
Current Updates
• US to invest in Indian Tier II cities• Software exports from Tier-II cities up: Minister• Infosys eyeing Tier-II cities for expansion• Tier II cities - The next IT destination• Domino's spreads to Tier II & III cities in India• Fujitsu Consulting eyes tier-II cities• It’s raining projects on Pune• Pune On top of state list with 13 SEZs @ Rs 8.8Kcr• IT Exports rise by 15.01 percent from SEZs.
Cons of SEZs
• Lack of Proper Rules
• Diversity in Development
• Mangrove Destruction
• Fertile Land Destruction
• Land Requirements
Observation & Findings
• Maharashtra State exploring Tier II cities.
• Increase in FDI in Tier II cities.
• Pune as a Tier II city makes a shift towards Tier
I parameters.
• IT sector in Pune city major contributor in SEZ
exports.
Conclusion• Special Economic Zones have boosted Exports.• Increase in Trade & Commerce Activities due
to SEZ.• Tier II cities got a gateway due to SEZ.• Development of Tier II cities in faster pace.• SEZ Policy needs revision from time to time.• SEZ to make more concrete rules with regards
to Small Scale Investors & Developers.
Bibliography
• Indian Economy – Ruddar Datt & KPM Sundharam 58th edition
• http://www.economictimes.com/• http://www.sezindiainvest.com/• http://www.mumbai.stpi.in/• http://www.sezonline-ndml.com/• http://sezindia.nic.in/index.asp/• http://www.india-reports.com/ • http://www.silliconindia.com/
Any Questions