Development And Implementation Of Special Economic Zones Economics Essay

Development And Implementation Of peculiar(prenominal) frugal districts Economics EssayA spare Economic Zone (SEZ) is a geographical region that has opposite economic and other laws and is more assoil market lie in comparison to a countries established laws. India first passed the finical Economic Zone Act in the year 2005.This paper discusses the advantages and disadvantages of a Special Economic Zone and how it benefits Foreign have Investors and the scope of Project Development in India in a Special Economic Zone. There be variant factors affecting the project outgrowth of a Special Economic Zone in India which give be discussed in depth. The main focus of the question is to develop a project suppuration for a business in a Special Economic Zone in India.Statement of question headlandAccording to me the statement of look into Question will be the Analysis of the facts from the past and from the present scenario in the Special Economic Zone developments and ascert ain the future of the development of Special Economic Zones in the hosting country. Also, I will concentrate on presenting a real life example on understanding nigh developing and implementing in the Special Economic Zone.Theoretical RationaleIndia is right now a fast(a) growing economy and the Special Economic Zone play a major role in flourishing it. Special Economic Zones has led to increase in Foreign Direct investment (FDI) by foreign investors in the form of International Business or Multinational Corporation (MNC). The G ein truth directnment of India has been participating in the development of the Special Economic Zone by formulating polices, canvasing them regularly and have safeguarded that ample facilities be forgetd to the developers of Special Economic Zones and also to the companies setting up themselves in the Special Economic Zones in India. Special Economic Zones in India are created by the Government of India. The Special Economic Zones in India are slip a way by Government-Private or solely Private ownership. They provide special provisions to develop the industrial fruit in that area. The first Special Economic Zone was launched in 1965 in Kandla, Gujarat. There are dissimilar incentives and facilities provided to the units in the Special Economic Zones including Foreign Investment, Duty free spell, Domestic procurement of goods for development, exemption of conglomerate taxes, exemption from customs/excise duties, operation and maintenance of the Special Economic Zones.Since the Special Economic Zones provide a lot of add-ons for investors it acts as a very eye catching zone to develop a business but, there are a lot of challenges that are to be faced by them. Also, the Special Economic Zone attracts the Foreign Investors due to the exemption of customs or excise duties, taxes and the similar creates just about added challenges that are to be faced by the Foreign Investors. The Foreign Investors face cultural, political and legal challenges in a different land. Developing the Special Economic Zone also benefits the country. It creates employment for a ample population improving the employment rate in the country and thereby, reducing poverty. The Foreign Direct Investment (FDI) that comes into the country generates flow of money in the country.John dunning provided a conditionwork approach namely Ownership, view and internationalization (OLI Framework).Marco Neuhaus (2006) states that the framework points out some advantages of ownership one get toprise whitethorn come across by doing business overseas. The location suitability for the firm is also evaluated using this framework. This might help the determination of an enterprise to venture overseas for the business or not. Thirdly, the concept of internationalization is addressed by the OLI frame work which can help an enterprise in setting up an operations plan. Using the OLI framework, a multinational enterprise (MNE) would be able to assess t he feasibility of setting up the business.I would equivalent to formulate a Project Development of a Special Economic Zone (SEZ) in India. I would like to analyze the various challenges that are faced by a business that want to enter the Special Economic Zone.The Implementation Of The Research Project For OrganisationThe presidency that I would like to debate in relation to my melodic theme of research is Ireo. I would base my research on the Special Economic Zones in the context of developing a Special Economic Zone in India. Ireo in JV partnership with Panchshil Realtors (pune) has developed Indias first IT Special Economic Zone (SEZ), EON Free Zone at Kharadi, Pune, India.Ireo is the first Private Equity Fund dedicated to the Indian real estate sector with a fund size of US $2 billion with the backing of global blue chip investors and fiscal institutions. They have emerged as a major pan-India developer equipped with financial strength to fully leverage gettable opportunitie s in this sector.Since establishing their presence in 2004, they have evolved into a fully integrated real estate administration that is both the financer and developer of its projects. The company has a pan-India footprint of projects in prime locations across NCR (including Gurgaon), Haryana, Punjab, Tamil Nadu and Maharashtra under various stages of developments and implementation.Combining the best of Indian and international resources, their team consists of accomplished Indian and expatriate professionals from diverse backgrounds to triad initiatives and to deliver best in class products and services to their customers.Preliminary Literature ReviewThe literature review was compiled using library search and electronic resources. Since the Special Economic Zone concept is relatively saucily in India, There are considerably less number of journals and e-books in this field. A few of those resources and publications were reviewed for this front literature review.Special econom ic zone Act is a program introduced by the state for the development of the country. It has been initiated by the Indian government to create a free market economy and free parcel out among nations, abolition of national boundaries and dismantling the nation state system giving priority to Market over the state. (Partha Mukhopadhyay Jan 2008)Special economic zone is a geographic region that has economic laws more progressive than that of the countries veritable(prenominal) economic laws. These zones are known by different names in different parts of the creation like free trade zone(FTS), bonded free zones(BFZ) , industrial free zone (IFZ) and trade processing zone.( Jona Aravind DohrmannJanuary 2006)Export processing zones is an ancestor of special economic zone. The main purpose is to attract industries which are trade oriented by offering them favourable investment and trade condition as compared to the rest of the country. The UN industrial development organization (UNID) identifies five attributes of export processing zone they are1) Dominated by market mechanism.2) limit to a limited region.3) Specialize in production of export goods and offer special encouragement for such(prenominal) productions.4) The primary goal is employment generation, foreign investments and foreign exchange.5) The Secondary goal is technology transfer, developmental linkages and regional development.The Free trade zone policy in 2000 was re launched by the Bharathiya janatha party (BJP). The name was changed from export processing zone to special economic zone. The policies purpose was to make SEZ an engine for economic growth back up by quality infrastructure complimented by an attractive fiscal package both at the primaeval and state level with minimum possible regulations.( Jermy Grasset and Frederic LadyJanuary 2007)The features of SEZ scheme areNo license take for import.Manufacturing or service activities allowed.SEZ units to be positive net foreign exchange ear ner within 3 years.Domestic sales subject to full custom duty and import policy in force. climb freedom for sub-contracting.No routine examination by custom authorities of export or import cargo.The UPA government enacted the special economic zone act 2005 which was passed in june 2005 and came into force on 10th feb 2006 with the relation of the SEZ rule in 2006.Three categories of SEZMulti product SEZSector specific SEZFree trade and warehousing zoneThe first category signifies the manufacturing of services of two or more goods in a sector or goods or services falling in two or more sectors. Contiguous area of vitamin C hectares or more is required.The second sector is meant exclusively for one or more products or services. This includes biotechnology, gems and jewellery, non conventional energy, hardware and software and electronics. Minimum area requirement of 100 hectares of contiguous and vacant land is required.The threesome sector the minimum area requirement is 40 hecta res of contiguous or vacant land and the reinforced up area should not be less than 10 hectares.154 SEZ were notified under SEZ act 2005. IT sector has the maximal number.Many issues have been brought up in relation to SEZ in India the main beingLocating land. relief of labor lawsUsage of waterFarmers are protesting against for acquisition of land this leads to destructions of employment of peasants whose land is acquired and provide very little employment opportunity to highly skilled and educated individuals and the totally net employment generated may well be negative. In many cases valuable land has been given away at concessional prices.To purpose the implications of SEZ may cause increasing socio political crisis due to the complexity of the society. In order to avoid polarisation of the society, civil society should engage to create a consensus on developmental issues. possibility to be triedFeasibility of special economic zones after 10-15 years.Availability of land in th e future.Data Sources and the Justification for the prime(a)Choice of information sources forms the most integral part of any good research. I would use the catch reviewed ledger articles, articles from Business magazines, Newspapers, reports. Journals like Journal of Business Research, Journal of International Business Studies, Indian Journal of Economics and Business. Magazines such as Business World, Business Today, The Business Magazine, Forbes, Business Week etc. and newspapers like the Financial Times, The Economic Times, The Economists etc.Peer reviewed Journals, Magazines and newspaper form the most trusted source of breeding and is also available on the internet. Books are the first choice for trusted information.Use of the Aston library and e-library is the place to get these sources of information.Research DesignA Research Design is the plan for a study, guiding selective information accretion and analysis. A Research Design helps the study to locate the problem and to follow economical procedures.The Research Design for my study will be as followsDefine TermsBackground information of the topic of researchLocate the problemCreate prioritiesI will follow 2 main types of Research and they are Secondary Research and Qualitative Research techniques. The data that is already written or produce by someone else for their purpose of study is classified as Secondary Research. Qualitative Research Techniques consists of Interviews, focalise Groups, and Questionnaire etc.Methodology to be employedIn doing this research I will use primitive Data and Secondary Data. As said earlier, Primary data will involve qualitative techniques such as Interviews, Focus groups, Questionnaire etc. For primary data collection I will choose a real life example of a firm entered the Special Economic Zone, as mentioned earlier Ireo. I will do research on how did the organization setup a Special Economic Zone. Since, the organization is a foreign company entering the Indian market I can gain first-hand information from the firm regarding the challenges they faced while setting up a business in a different country. For this purpose I will Interview certain employees of the firm get information on the research survey conducted by them during the setting up phase.As far as the secondary data collection is concerned I will use Academic books, journal articles, Magazines articles and Newspapers. After putting through and through the data collected from both the sources i.e. secondary and primary I can get a clear flick of the past and the current scenario of the development of Special Economic Zones. Then I can answer questions of Hypothesis to be tested.Ethical ConsiderationsThe research will comply with research ethics in terms of entire transcription of data and findingsObjectivity as a researcherCompliance with the principles of not harming anyone as a result of this researchCompliance with Aston Business School rules on plagiarismNot obtaining inform ation through illegal or restricted proceduresCompliance with the respect of copyrights reserved for journals and published