With the Special Economic Zone (SEZ) Act set to complete two years since its enactment on February 10, 2006, Union Minister for Commerce and Industry Kamal Nath last week sent a detailed report to Prime Minister Manmohan Singh on the impact of the SEZ policy. Presenting success stories as well as expected investment and employment generation from approved SEZs, Nath noted that they have made “a major impact on employment generation and mobilisation of private investment in building up infrastructure”.The big numbers since SEZs came into being are — investments of Rs 52,193 crore (of which Rs 5,825 crore is Foreign Direct Investment), direct employment to 60,000 people (in addition to 40,000 employees in 12 SEZs set up prior to the 2006 Act). “With the operationalisation of the 187 notified SEZs, I expect an additional investment of Rs 1,00,000 crore and an additional employment for 1 lakh people before September 2008,” Nath predicted.“Thus, almost 2 lakh direct employment would have been created in the SEZs in the last two years with indirect employment of twice this number (4 lakh),” Nath wrote, urging that this should be considered in the context of the Export Processing Zones, set up by the Centre since 1968 where only 1.75 lakh jobs have been created till date. Nath said he expects 3,00,000 additional jobs to be generated in the new SEZs by December 2008 and expects the investments to touch Rs 2,85,279 crore by December 2009.On the contentious issue of land acquisition, Nath stressed that apart from 10 per cent of total area limit for acquiring agricultural land, states have been informed that the SEZ Board of Approvals “will not approve any SEZs where state governments have carried out or propose to carry out compulsory acquisition of land after April 5, 2007”. The 187 notified zones have only utilised 24,560 hectares of land.Ironically, Nath’s status report on SEZs was sent to the PM on January 3 — the day he said that the Centre could “review all Goa SEZs” after a meeting with Goa Chief Minister Digamber Kamat who had sought to cancel even the three notified SEZs in his state.On the regional distribution of SEZs, the report noted that the 404 formally approved zones were spread across 19 states and three UTs, while the 167 SEZs with in-principle approval were spread across 15 states. The note detailed a dozen success stories among the new SEZs, in terms of employment and investment generation. These included the $250 million Nokia SEZ in Sriperumbudur, the $0.5 billion Quark city zone in Chandigarh, the $400 million Flextronics SEZ and the Maharashtra Airport Development Corporation SEZ expected to employ 1.2 lakh persons. The first case of Sri Lankan FDI in the country, Brandix Apparel in Andhra Pradesh, is also on the list. It’s expected to provide 60,000 jobs by next March and investments in this SEZ are to be scaled up from the current $100 million to $1.1 billion.In the first year after the SEZ Act came into being, 2006-07, exports from functioning SEZs jumped 52 per cent from Rs 22,840 crore to Rs 34,787 crore. “Projected exports from all SEZs for this year is Rs 67,088 crore,” Nath said, pointing out that exports of Rs 25,013 crore has already been effected in the first half of this fiscal.
