A BRIEF INTRODUCTION OF SPECIAL ECONOMIC ZONE AND THE IMPORTANT ISSUES CONNECTED TO IT

As you all know Ihe Govt. of India has notified the policy for special economic zones (SEZs) under a government resolution, which will apply to all SEZs in the country. This includes the SEZ in Hassan and three-four proposed SEZs in coastal Kamataka subject to the framework for SEZ determined by me government of India(GOI) from time to time. As per me state policy, all SEZs in the state will be declared 'Industrial Townships' (Notified area) The management of the SEZs will be under the designated development commissioner who will grant all the permissions as single point clearance from his office. These will include registration of the unit, allocation of land, permission for construction of building and approval of building plan, power connection, environmental clearance, water requirement etc. The SEZ authority will ensure continuous and quality power supply to SEZ units. The SEZ developer will be permitted to make arrangements of power through the establishment of power project as independent power producer (PP) as well as transmission and distribution of power. The SEZ developer will approve power connections and carry out billing of units in the SEZ. The SEZ authority may also ensure standby arrangement through establishing grid connectivity so as to draw power from the electricity board subject to their entering into separate agreement with me board on mutually acceptable terms. SEZ units will be granted automatic approval to set up captive power plant. All types of environmental clearances will be issued by the development commissioner, except for those falling under the purview of GOI. The SEZ developer will be granted approval for development of water supply and distribution system to ensure the provision of adequate water supply for SEZ units. Implementation of labour laws within SEZ will be simplified. A consolidated annual report(CAR) has been designed which will be filed by industrial units once in a year. The industrial units in SEZ will be declared as Public Utility Services under the provisions of the Industrial Disputes Act, 1947. There will be exemption on payment of stamp duty and registration fees on transaction of land as well as financial agreement, deeds etc. Sales tax and other state taxes will not be imposed on transactions within SEZ. Inputs made to SEZ units from DTA units will also be exempted from sales tax. Exclusive arrangements will be made within SEZ for law and order. A committee headed by me Chief Secretary has been constituted to review the promotion, development and functioning of SEZs in the State. The government of India had announced a policy for SEZs during March 2000 under the Import-Export Policy with a view to augmenting infrastructure facilities for export production.

The Kamataka state has favourably responded to the Government of India policy and has established one SEZ at Hassan and is proposing to establish three SEZs in coastal Kamataka; one each in Tadri (Uttara Kannada), Padubidri(Udupi) and Baikampady (Dakshina Kannada) The Central Water Commission indicated in 1996 that 16,936 hectares were lost and 51105 people were displaced and affected by various development projects in coastal Kamataka during me 90s due to acquisition of large tracts of land for industries. To accommodate these schemes a number of inhabited villages need to be relocated. Hence, some of me issues that would be raised before this workshop are:

What are the implications of land acquisition for the development coastal SEZs - will there be displacement of local communities and how will they be rehabilitated?

The land proposed for establishing SEZs in the coastal region will come in the CRZ. What will be the impact of relaxing me CRZ Policy to establish industries in coastal SEZs and its impact on water and the environment ? Who will conduct the Environmental Impact Assessment ? How is this sponsored? And what criteria will be considered ? What will be the impact of implementation ofEIA report ? How will uie increased demand for water by the industries within SEZ affect the availability of drinking water and water for irrigation? There has been a proposal for the establishment of Eco-sensitive Zone considering the fragile nature of the coastal and western gnat ecosystem of Kamataka. How this will be affected ? What is the progress? What are the legal and regulatory frameworks to implement me environmental labour and other local self government laws? The environment of coastal Kamataka has been under constant and severe pressure by industrialization. How can we reduce this pressure? One of the principal arguments for the export-oriented production of high value commodities is that the benefits of the increased foreign exchange will "Trickle down" to benefit the poor and create more jobs. As the importance of products produced in developing countries in the international trade increases how many and how much of these benefits actually trickle down?