COASTAL ECONOMIC ZONES IN INDIA:-
SOME LESSONS FROM EMERGING ECONOMIES
Author:-Shan Mohammad & Mashungmi Zingkhai
(Department of MBA-IB, Pondicherry University-India)
This is a descriptive study deals with the various aspects of development in the nation after introducing the concepts of coastal economic zones and how India should learn from emerging economies of the world, specially from China. India is trying to copying the ‘Shanzen-style’ of Chinese model of CEZ. If, it successfully utilize the coastal zones like as china, can boost the country’s export and reached the economy at peak. Here we have discussed ‘Special economic zones’ of the world, from which India can learn various methods and infrastructural framework system. No one can deny the benefit ; success of CEZs but on other hand it includes a lot of socio-economic negative impacts on lifestyles of coastal communities due to vanishing the traditional and local work of the people. It also talks about the role of coastal economic zone in the nation building and how industrialists entertained the advantages in newly established CEZs.
(KEY WORDS:-Coastal Economic Zones, Development, Emerging Economies, country’s Export, Socio-Economic Impacts)
MEANING:-Coastal economic zones are spatial economic regions including group of coastal districts with strong linkage to sea ports. It is a geographical region that has economic laws different from country’s typical Laws. Each CEZ consist multiple CEUs to each CEU consist more than one industrial cluster and each cluster have several manufacturing units.
Coastal Economic Zones are integral part of the chinese economy and have contributed significantly to the Chines growth story. Our Indian government inspired by the Shenzen-style Chinese model of CEZ to boost India’s manufacturing sector. In India the concept of coastal economic zones came into existence with Sagarmala Project, Coastal economic zones is one of the major segment of this project. Initiative of Sagarmala first taken by Ex-Prime Minister ‘Atal Bihari Vajpayee’ in 2003 with the goal to leverage India’s vast coastline and industrial waterways to drive industrial development. But in 2004 the government got changed and project became delay. On 25th March 2015 cabinet gave approval and Ministry of Shipping launched this scheme in Karnataka on 31st July 2015.
The CEZs are the backbone of government’s project and are build as important mover of Make In India scheme. By using this indigenous manufacturing scheme in this year 2018, Finance minister announced Rs.168.57 crores for the development and modernization of CEZs. Government’s target to complete this project by 2035.
According to government each CEZ will consist of multiple CEUs (coastal economic units) and more than one industrial cluster can be housed within a CEU. In each industrial clusters, there can be several Manufacturing units. Every coastal economy will also create synergy with industrial corridors passing from the region like:-(Vishakhapatnam-Chennai industrial corridor, Mumbai-Bangalore economic corridor, Delhi-Mumbai industrial corridor ; Dedicated freight corridor etc.). Government proposes 14 business friendly coastal economic zones (CEZs) across major and non- major ports of the India with the huge investment of 6,500,000 million.
Following table (Fig. 1) is showing relevant details of Coastal Economic Zones of the country.
S.No. COASTAL ECONOMIC ZONES (CEZs) STATES LINKAGE PORT POTENTIAL INDUSTRIES
1. Kachch-CEZ Gujrat Kandla, Mundra Petrochemicals, Cement ; furniture
2. Saurashtra-CEZ Gujrat Pipavav, Sikka Apparel ; Automotive
3. Suryapur-CEZ Gujrat Dahej, Hazira Marine Clusters
4. North Konkan-CEZ Maharashtra JNPT Power, Electronics ; Apparel
5. South Konkan-CEZ Maharashtra ; Goa Dighi, Jaigarh, Mormugaon Refining, Steel ; Food processing
6. Dakshin Kanara-CEZ Karnataka New Mangolore Petrochemicals
7. Malabar-CEZ Kerala Cochin Apparel ; Refining
8. Mannar-CEZ Tamil Nadu VOCPT (Tuticorin) Leather Processing ; Power
9. Poompuhar-CEZ Tamil Nadu Karaikal Steel ; Petrochemical
10. VCIC South-CEZ Tamil Nadu Chennai, Kamarajar (Ennore) ; Katupalli Electronics ; Ship building
11. VCIC Central-CEZ Andhra Pradesh Krishnapatnam Eectronics
12. VCIC North-CEZ Andhra Pradesh Vizag, Kakinada Food processing, Petrochemicals ;Cement
13. Kalinga-CEZ Odisha Paradip, Dhamra Petrochemicals ; Marine processing
14. Gaud-CEZ West Bengal Kolkata, Haldia Leather processing
There are 29 ports linked industrial clusters across several sectors. In which fourteen Discrete manufacturing clusters, two Refining ; petrochemical clusters, three Power clusters, four Petrochemical clusters, two steel clusters, two Maritime clusters and two Cement clusters.
The proposal of CEZ came into force when we started feeling that our country is lagging far behind in port led industrialization than China and China is the key competitor of India in manufacturing. The CEZs are expected to increase India’s merchandise exports by 110 billion by enhancing economic competitiveness.
RECENT SCENARIO OF COASTAL REGIONS IN INDIA
On the Basis of Geographical aspect:- According to institute of ocean management (Chennai) the coastal location of India is divided into four pieces (a) Offshore sandy beach (43%), (b) Rock beach (11%), (c) Marshy coast (10%) & (d) Muddy flats (36%). India has approximately 7516 kms long coastline where mainland is about 54322.6 kms and Island territories is 2094kms.
Nine states (Gujrat, Maharashtra, Goa, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, Odisha, West Bengal) and four union territories (Daman Diu, Andaman Nicobar, Pudhucherry, Lakshadweep) are covered coastal regions of India and these states have 13-major & 200 non major ports.
Given table (Fig.2) showing demographical features of seaside states and union territories.
Length of coastline in (kms) Population of coastal distt. In (million) Population Density per (km sq.)
1. Andhra Pradesh 974 33.6 308
2. Goa 104 1.46 394
3. Gujrat 1600 39.89 308
4. Karnataka 300 4.70 319
5. Kerala 590 27.46 859
6. Maharashtra 720 28.63 365
7. Odisha 480 11.62 269
8. Tamil Nadu 1076 33.38 555
9. West Best 158 29.28 1029
10. Andaman & Nicobar Island 1912 0.378 46
11. Daman & Diu 27 0.242 2167
12. Lakshadweep 132 0.064 2013
13. Pudhucherry 45 1.24 2598
(Fig.2) (Source:-census 2011)
On the Basis of Economical aspect:-The economy exist on coastal zone, called Blue-economy. GDP Contribution to the nation is higher from the mega cities like (Mumbai, Chennai, kolkata) which are situated along the coastline. The eastern and western coasts are most important trading centers from ancient times. All the 13 ports contributed a lot in the economic growth of India and still they are giving employment to the lakhs of people & having large contribution in Import-Export activities. The Indian coasts are of enormous socio-economic important which inherit highly productive Eco-system which has a rich marine biological diversity & highest number of fish species in all over the globe. Fisheries business not only provide food but also generate income, employment and foreign exchange for the country. Seaside regions especially engaged in the activities of fishing, agriculture, oil exploration, handicraft and tourism.
ROLE OF COASTAL ECONOMIC ZONES IN NATION BUILDING
Coastal regions are playing significant role in the economic development of the nation about 90% of India’s merchandise trade passes through sea ports. These ports would be major factors of economic growth of the country in coming period. That’s why government is more focusing on interconnecting these ports each other and also link railways & roadways with them. Government aim is to mixing the blue-economy with industrial economy and lead it towards the overall progress of the coastal locations as well as nation.
Expected view of Coastal Economic Zones
Following aspects which will promote the socio-economic development of the country.
The proposed port-led development is expected to boost the export by 110 billion US dollars due to saving shipping time and other several resources, it will increase the global competitiveness of Indian exports.
According to government plan each coastal state have one or two CEZ, the industrial clusters within these zones will benefited by lower cost due to avoiding useless movement of ships. In India, containers travel 700-900 km from manufacturing units to cargo.
This scheme admits that there is a gap in demand and supply of skilled manpower to implement the project successfully in the coastal zones and required to be plugged using special skills development program. The CEZ propose a massive training drive among the people in the coastal regions to meet the requirements. It will more beneficial for unskilled & semi-skilled population of the country.
CEZ program entails an investment of Rs.4 trillion and is likely to contribute 2% to India’s GDP from coastal states.
Due to CEZ project more than 10 million direct and indirect jobs will be generate. The main focus would be attracting large world class industries that would each promise to develop 10,000-40,000 direct skill-based jobs within a specified duration.
Because of introducing CEZ scheme in coastal zones the level of poverty and unemployment would be reduce and per capita income of these states will rise which lead coastal community towards the high standard of living.
Many electricity clusters will take place in this project which will solve the problems of power in the country.
There will be good connectivity among railways, roadways and ports which support the folk in smooth ; comfort travelling from various locations. This scheme will improve the overall infrastructure of coastal regions.
VULNERABILITY ; SOCIO-ECONOMIC IMPACT ON COASTAL ECO-SYSTEM
With the above explained developmental aspects of CEZs, it has also some expected unassertive impacts on coastal environment which will destroy the traditional livelihood of coastal communities living within the CZR (coastal regulation zone) 500m from the sea. New established industries will finished the greenery and agricultural fields. Some assumed issues might be take place in the coastal regions due to implementation of CEZs scheme are as follow.
Fishing is a significant sector in the country, which provides jobs to million of people and contribute to food security of the nation. According to CMFRI there are 3,288 marine villages and 1511 marine fish landing centres in nine maritime states ; two union territories. Total marine fisher folk population is about 4 million and nearly 61% of fishermen are BPL category. At this particular juncture if union government is taking initiatives regarding CEZs, would be against to fishing community and will sweep the income factors of the people.
Almost coastal zones have greenish surroundings with fresh air, beautiful views and hygienic environment but introduction of CEZs are serious concerns would raise about the environmental effects like coastal erosion, coastal accretion as well as severe problems of dredging and the effects on the sea bed due to this.
When the industries like atomic thermal power stations, disastrous chemicals industries, hotels, leather industries etc. will cover the seaside and release their waste (toxins ; other dangerous elements) in the sea which pollute the water as well as destroy the lives of aquatic animals.
These industries might be rise the temperature of coastal regions by releasing greenhouse gases (carbon dioxide, methane, nitrous oxide etc.) which pollute the residential area and directly affected the livelihood.
These big manufacturing corporations will vanished the traditional rural business of coastal community (like:-handicrafts, fishing, agro-products, animal husbandry etc.).
Industrial effluent damages the natural biological purification mechanism of sewage treatment causing severe soil ; water borne diseases. It’s waste enter in the food chain cause number of undesirable effects to living beings and animals.
CEZs ARE ADVANTAGES FOR CORPORATES
It would be a golden opportunity for corporates who are going to receive the offer for establishing business premises in Coastal Economic Zones. Some expected major benefits are as follow which would entertained by industries.
Still coastal regions contain large number of natural resources in their lap, factors of production like optimum land near seashore, cheap labour in rural areas & raw material at affordable rates with minimum logistic cost.
Due to introducing of CEZ specially the demand of infrastructural sector will boost in coming decade because in this, there will be need of construction of roadways, railways, manufacturing plants, ports, warehouses etc.
The shipping companies like L & T, Gurat pipavav, Adani ports & Sical have bright future in coming era because they are getting chance in CEZ project & will enjoy the benefits of well framed infrastructure in coastal zones which connected all the ports of India.
Niti Ayog has pushed for a 10 years corporation tax holidays for proposed coastal economic zones provided these generate a threshold of employment.
Tourism companies demand will rise due to introducing of CEZ and help the nation to collecting more foreign reserve.
By seeing every dimension of this scheme reached at this level that really the decision related to CEZ is beneficial & right step by the government. People should welcome this assignment in their regions, may be initially it would create difficulty for short term but at largely it is in favour of society. No doubt it will come out as a significant factor of country’s growth but the government should try to compensate the fishing community who are suffering from this project and also make some scientific arrangement for saving the environment through harmful releasing elements from industries. Instead of focusing on area specific rules ; tax concession, government should focus on uniform norms to promote manufacturing in India.
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