Exporters misusing govt sops: study

NEW DELHI, JULY 5: Garment and knitwear exporters at Chennai’s Export Processing Zone (EPZ) are "misusing government infrastructural and tax concessions," a field study by researchers of a Trivandrum-based Centre for Development Studies has revealed. The study revealed that many of the EPZ employers at Chennai closed down their units on some pretext or the other and they then start a new unit in one of the other EPZ’s in the country or the same EPZ under a different signboard.

According to the centre’s EPZ scheme, ready-made sites, buildings, water and power connections were provided on a priority basis to the exporters besides warehouse facilities. The scheme also allows 100 per cent foreign equity, provides a tax holiday for five years and concessions in respect of import duties. In addition, the state governments also provide subsidies. The study said employers were “typically exploiting concessions and facilities to make quick gains and kept shifting their units, causing great hardship to workers andconsiderable drain to the state’s exchequer”.

The Chennai EPZ has about 83 units operating at Tambaram on city’s outskirts. Of the 69 units that were working in 1995, 19 were garment and knitwear units. Of the total workforce of 40,000 about 25,000 are women and five thousand children.