SEZs to create 470,000 new jobs in Andhra

Over 470,000 new job opportunities will be created through the Special Economic Zones which are expected to spur the overall development and industrialisation of Andhra Pradesh.

The government of India has approved 48 SEZs for Andhra Pradesh. Of this seven have been approved in-principle, while 41 have been formally approved. Information technology/IT enabled services (IT/ITES) will have 27 SEZs, pharma (6), multi-product (4), footwear (3) and one each for biotech, apparel, building products, services sector, paper, textile, gems & jewellery and semiconductor SEZ (Fab), according to a media statement from the Andhra Pradesh chief minister's office.

As far as IT/ITES SEZs are concerned, the minimum investment is Rs 250 crore (Rs 2.50 billion) with a net worth of Rs 50 crore (Rs 500 million). The developer/company should construct a minimum IT space of 10 lakh (1 million) square feet. The jobs to be created would be in the ratio of 1 job for each 100 sq ft, i.e. 10,000 jobs per 1 million sq ft of minimum space to be constructed. The total number of jobs to be created by these 27 SEZs which were approved by Government of India would be 270,000.

Further, the government of Andhra Pradesh attempted to spread IT SEZs around Hyderabad, including the neighbouring districts, to cater the needs of SMEs (small and medium enterprises) who require quality and affordable space in view of scarcity of land in Hyderabad and Tier-II cities. Almost ninety per cent SEZs are being developed in the private land only where the government has neither acquired any land nor given any government land.

The SEZs approved for gems & jewellery (50,000 jobs), footwear /leather (30,000 jobs) and apparels (60,000 jobs), for which land has been allotted by the government, are employment oriented. The government of Andhra Pradesh is encouraging this type of SEZs keeping in view the high employment potential. By establishing these SEZs, 140,000 jobs would be created among lower middle class, weaker sections particularly Scheduled Castes/ Scheduled Tribes/Backward Classes and Minorities.

Andhra Pradesh is a major centre of pharma industry. For the SEZs which are coming up in the pharma sector, no land has been allotted by the government. These SEZs are being established in the private land owned by the developer/company. The government of Andhra Pradesh is extending support as required by them in terms of various approvals, etc. The state government is only the facilitator. About 10,000 jobs would be created in this sector by establishment of SEZs.

In respect of multi-product SEZs being developed for Hindustan Petroleum Corporation Limited at Visakhapatnam and Oil and Natural Gas Corporation at Kakinada, the State Government has acquired waste / single crop lands and is making it available to them.

These are long term projects and when fully functional, these will create about 50,000 jobs in the manufacturing sector.

The SEZs will create a conducive environment for investment and exports providing quality infrastructure, thus attracting more and more firms, both foreign and domestic to come to these zones.

Fiscal benefits provided to both the developers and the SEZ units reduce operating costs and work on the principle of 'not exporting taxes.' SEZs facilitate single window clearances, quality infrastructure services such as water, power, roads, gas, transport, besides quality living space.

SEZs, otherwise called as 'Deemed Foreign Territories,' are envisaged to have complementary social infrastructure such as housing, hospitals, schools, entertainment, market facilities so that a walk to work environment is created.

These zones offer a simple, integrated efficient tax solution and would fuel further economic growth. Such zones will help in generating employment as well as infusing advanced technology. They can be developed by a private or a public sector developer or in a Public-Private-Partnership model.

The SEZs with their preferential fiscal policies would drive exports and create employment. SEZs will be the launch pads of future economic growth. Employment generation and technology transfer due to foreign direct investment would certainly result in a cycle of higher investment, higher income generation, higher savings capacity and further investments and consequently lead to further economic growth, the statement pointed out.