Role of Sez
IMPACT OF SEZ ON EMPLOYMENT, POVERTY, HUMAN DEVELOPMENT AND CONCLUSION ON INDIA SEZ’S TO IMPROVE HUMAN DEVELOPMENT
Abstract
This report aims at examining the impact of Special Economic Zones (SEZs) on human development and poverty reduction in India. It identifies three channels through which SEZs address these issues: employment generation, skill formation (human capital development), and technology and knowledge up gradation. It examines how the impact of SEZs is passed through each of these channels. It found that labor intensive, skill intensive and technology intensive firms co exist in India’s zones. The data was generated through across the three largest SEZs (in terms of their contribution to exports and employment) : SEEPZ, Madras and Noida. The analysis reveals that ‘employment generation’ has been the most important channel through which SEZs lend themselves to human development concerns, in India. Employment generated by zones is remunerative. Wage rates are not lower than those prevailing outside the zones. Besides, working conditions, non monetary benefits (such as transport, health and food facilities), incentive packages and social security systems are better than those prevailing outside the zones, in particular, in the small/informal sector. The role of SEZs in human capital formation and technology up gradation is found to be rather limited.
Introduction
In this era of globalization, most developing countries are witnessing a shift away from an import substitution based development strategy to one based on export promotion policy. As part of their policy instruments to promote exports, many of these countries are vigorously promoting export processing zones (EPZs). EPZs are seen as a key instrument not only for promoting exports and earning foreign exchange but also for stimulating economic growth through additional investment, technology transfers, and employment generation. A majority of new zones have taken root
Abstract
This report aims at examining the impact of Special Economic Zones (SEZs) on human development and poverty reduction in India. It identifies three channels through which SEZs address these issues: employment generation, skill formation (human capital development), and technology and knowledge up gradation. It examines how the impact of SEZs is passed through each of these channels. It found that labor intensive, skill intensive and technology intensive firms co exist in India’s zones. The data was generated through across the three largest SEZs (in terms of their contribution to exports and employment) : SEEPZ, Madras and Noida. The analysis reveals that ‘employment generation’ has been the most important channel through which SEZs lend themselves to human development concerns, in India. Employment generated by zones is remunerative. Wage rates are not lower than those prevailing outside the zones. Besides, working conditions, non monetary benefits (such as transport, health and food facilities), incentive packages and social security systems are better than those prevailing outside the zones, in particular, in the small/informal sector. The role of SEZs in human capital formation and technology up gradation is found to be rather limited.
Introduction
In this era of globalization, most developing countries are witnessing a shift away from an import substitution based development strategy to one based on export promotion policy. As part of their policy instruments to promote exports, many of these countries are vigorously promoting export processing zones (EPZs). EPZs are seen as a key instrument not only for promoting exports and earning foreign exchange but also for stimulating economic growth through additional investment, technology transfers, and employment generation. A majority of new zones have taken root
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