Export Processing zones in India

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Clearly, relative advantages of SEZ units vis-à-vis other domestic firms in terms of incentives have been declining. We shall now evaluate the availability of infrastructure facilities and the quality of governance. V.2. Infrastructure facilities V.21 Availability of infrastructure Infrastructure within EPZs is generally superior to that available in the wider economy. Table 12 however shows that no exclusive arrangements have been made for water, electricity or telecommunications by the zone authorities in India. Only two of the zones namely Cochin and Chennai have water purifiers and effluent treatment plant. Captive power plant scheme is applicable but is not operational in any zone except Falta and Vizag. Only two zones reported providing storage facilities. Respondents complained about poor roads leading to the zones, inadequate transport facilities for the zones and within the zones, poor street lights and poor security. Some respondents have also complained that there are no clear guidelines for waste disposal and that they are accumulating it. Surat appears to be facing severe scarcity of water supply, electricity , poor street lighting, poor banking and poor road facilities. Falta is another zone where infrastructure needs tremendous improvement due to poor communication facilities (even ISD is not available), overflowing drains and poor transport facilities. Respondents from other zones have also voiced similar problems. Financial infrastructure is not convincing either. Surat does not have any bank. Falta and Chennai zones have only one bank. Some of the zones do not have even ATM facilities. Overseas banking units (OBUs) are either not existing or not operational. Falta and Surat do not even have post office facility. Social utilities seem have received the lowest priority. Vizag, Kandla and Surat are the only zones where 6-8% of the area is dedicated to such facilities. In all other zones, this area is negligible. Even basic facilities such as fire station, hospitals and guest houses are not available in most of the zones. 26
Table 12 : Provision of Basic infrastructure facilities by zone Water : Excusive arrangement Falta Cochin Chennai Noida Vizag Kandla Surat Yes Yes 2 Tubewell, 4 4 Central storage Bore well underwater borewell facility reservoir Water purifier No Yes Yes No No No Under construction Effluent No Yes Yes no No No Not required treatment Electricity : exclusive arrangement No Yes No No No No No exclusive arrangement captive power plant scheme Yes No No no Yes - Not operational Storage Yes No Yes No No No ICD No (under process) Yes Yes Same as above No Yes (In 2003) yes Telecommunica tion Financial Infrastructure Yes yes Yes BSNL Stpi. bsnl BSNL BSNL Banks 1 2 1 4 2 4 none OBU No Yes No 2 not No None Not (2004) operational operational ATM None 2 2 1 1 None none Post Office No 1 1 1 1 1 none Social utilities School No No No NO No No YES Hospital No Yes* No NO No No YES* Fire Yes No No NO No Yes NO Hotel Guest No Guest NO Guest Guest house Guest house house house house recreation Yes No Yes NO Yes Yes NO Shopping No no No NO yes Yes YES Complex Area dedicated to social utilities and residential 1.05% >0.5 Nil Nil 8.2 7.0% 6% • dispensary V. 22 Quality of infrastructure We asked respondents about the quality of the infrastructure. Their responses are summarised in Table 13 and 13a. Over 50% of the respondents rated water facilities less than satisfactory and water charges very high. Over 57% of the respondents have to make their own water arrangements to supplement the zone water supply (table 13a). Power availability is rated satisfactory or more than satisfactory by a majority of the respondents. This could be because 27
Page 1 and 2: WORKING PAPER NO. 148 EXPORT PROCES
Page 3 and 4: Contents FOREWORD..................
Page 5 and 6: I. Introduction ∗ The prevailing
Page 7 and 8: It also documents the trends and pa
Page 9 and 10: investment climate in 43 countries
Page 11 and 12: Several measures have been adopted
Page 13 and 14: IV. Export performance of EPZs/ SEZ
Page 15 and 16: clearer picture, we plotted the tim
Page 17 and 18: A part of this slowdown in export g
Page 19 and 20: The obvious question now is: Was th
Page 21 and 22: competitiveness. Several policy mea
Page 23 and 24: Figure 7 : Trends and value additio
Page 25 and 26: Figure 8: Performance of EPZs by se
Page 27 and 28: similar tax laws have been structur
Page 29: Table 10 : Exemptions from the stat
Page 33 and 34: Table 13a : Quality of infrastructu
Page 35 and 36: Table 15 : Quality of governance :
Page 37 and 38: companies outside the zone reported
Page 39 and 40: Table 20: How constraining are the
Page 41 and 42: may not be possible to provide such
Page 43 and 44: VII Conclusion The EPZ policy in In
Page 45: Mihir A. Desai, C. Fritz Foley, Jam

Export Processing zones in India

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