Special Economic Zones (SEZ) and their

role and Impact on Indian Economy

(Synopsis)

Submitted by: Chandra Prakash Devikar (12A)

EPGD-IB (2018-20)
 CONTENTS

1. Introduction
2. Objectives of Research
3. Scope of Study
4. Limitation of Study
5. Literature Review
6. Methodology adopted
7. Conclusion
8. Reference / Bibliography

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Introduction

A special economic zone (SEZ) is an area in which the business and trade laws are different
from the rest of the country. SEZs are located within a country's national borders

The purpose of the creation of SEZ as belows:

 To increase international trade balance

 Boost up the employment and job creation
 To increase the investment and attract foreign direct investment

The benefit expected from the company in a special economic zones that it can produce the
goods at a lower price and trade it in a competitive international market, thus generating
the revenue for the country.

Hence to encourage for setting up businesses in a zone and overcome the shortcomings on
controls and clearances, SEZ policies are introduced under SEZ Act 2005. These policies
encompass typically investment, taxation, trading, Quota, customs and labour regulations
including the tax holidays. This policy intended to make SEZs an engine for economic growth
supported by quality infrastructure complemented by an attractive fiscal package, both at
the Centre and the State level, with the minimum possible regulations.

Accordingly, with the intended establishment of SEZ, it is necessary to review the

performances of the SEZ. This performance is compared with expected job creation,
investment attracted and export revenue contributed. At the same time, assessment to
enhance the performance of the SEZ , review and amendment in the policy and Act ,
support structure needed , opportunities created and learning from the SEZ worldwide.

It is equally debatable for issuing of new SEZ or rejuvenate the old SEZ with new targets. It is
equally true to consider bringing replacement, modernization, technological up gradation or
expansion and hence compare what has been done and what is expected for the improved
performance.

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Objectives of Research

 The objective of this research is to analyze the impact of Special Economic Zones
Policy on:
 Export trend through SEZ
 Employment boost up and job creation
 Contribution of the Revenue generated by SEZ sector.
 Overall impact of SEZ on the GDP and country growth rate.
 The focus of research is to analyze the impact of the following factors on SEZ
performance :
 Administrative issues / procedures for approvals
 Land Acquisions for SEZ
 Lack of infrastructural facility
 End of tax holiday
 Restrictions and changes in policy
 External factors

Scope of Study:

The study primarily focuses on how the SEZ in India has evolved over the years in the pre
liberalisation and post liberalisation period. It also covers the learning’s from studies of
various other country SEZ and difference in its implementation in India. Adoption of policies
by State and Central Govt and assessment of its impact as needed time to time with
corrective measures.

Recommendations plan shall be established based on the study of positive factors as well as
negative factors affecting performance of SEZ.

Limitation of Study:

This research is limited to the above mentioned factors which are mainly affecting
performance of SEZ. This scope of study does not goes into the thorough analysis of SEZ
worldwide. However, SEZ were discussed for comparison to bring the parity which are

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successful worldwide. This study is for the recommendation on the factors which are shall
further enhance the above mentioned key performance indicators.

Literature Review

In India, the SEZ Act was implemented in 2005 to attracts the investors to invest in SEZ to
get benefits of globalization. At that time the concept is criticized by so many people but it
has implemented and benefited to all.

Preliminary literature review revealed that a fair amount of research has gone into analyzing
success and failure of SEZ during post liberalization era.

 Fact Sheet on Special Economic Zones

o This page explores the current facts of the performance of the SEZ and
provides the growth rate from the investment, employment generated in the
country as well as exports revenue received from SEZ.
 Current State and Performance Review of SEZs in India A Survey
o This paper explores the survey conducted on the performances of SEZ. Based
on the survey results, recommendations were provided. However, the study
focuses more on the administrative issues. To put it in current context, it
needs comparison with worldwide SEZ to be established and international
market condition and world economy.
 An Empirical Study On Problems Of SEZ In India
o Author provided information of the concept of SEZs in India
o Author has tried to explain problems concerning the SEZs
o Author has put focus on the prospectus of the SEZs in India ie. Success or
Failure.
 Performance of Special Economic Zones
o CAG has conducted performance audit on SEZ based on the sample basis.
o Primary aim of this audit was to assess the contributions of SEZs, and to
evaluate the actual potential, economic and social costs and benefits of SEZs
in the country

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Methodology Adopted:

For the purpose of analyzing the impact of the above-mentioned factors on the
performance of SEZ , data will be collected through the following sources:

 Secondary Data through different government websites available on public domain

including the ministry of commerce , international economic forums , RBI etc
 Secondary data through reports and research done through official of different
government agencies , NGOs and Research Associate.
 Literature reviews, journals and Research Papers

Conclusions

The research papers aims to analyse and study all aspects of SEZ Performance with
reference to multiple industries & multiple sectors with help of past and current context of
economy cases covering both successes and failure perception of SEZ Scheme and how it
can help policy makers chalk out administrative strategies in future in order to enhance and
growth rate of SEZ across country .

References / Bibliography:

 “Fact Sheet on Special Economic Zones” published by Ministry of Commerce ,

Department of Commerce , Govt of India.
 April 2016 “An Empirical Study On Problems Of SEZ In India” Volume : 5 | Issue : 4 |
Hitesh K.Prajapati.
 December 2014 “Current State and Performance Review of SEZs in India A Survey”
Dr. S P Sharma, Chief Economist, Rashmi Taneja, Senior Research Officer, Ms. Apurva
Munjal, Research Assistant.
 “Performance of Special Economic Zones” Report No21 of 2014 (Performance Audit)
, department of Revenue , Indirect taxes.
 “INDIA’s SEZs: EXPORT PERFORMANCE” Volume 4, Number 2, April – June’ 2015 Dr.
SP. Mathiraj12 R. Saroja Devi

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