Role of SEZ & PPP infrastructure projects in the Economic Development of Andhra Pradesh during 2003 2013

1. Introduction: Infrastructure development in India is the most urgent area for consideration in respective of attracting FDI, accelerate the GDP growth and to create the employment. The importance of Infrastructure development and its new concepts to formulate are like SEZ and PPP and other modes. India is in the global arena for increased foreign investment - both through the Equity markets termed Foreign Institutional Investment (FII) - and Foreign Direct Investment (FDI). While its size and growth potential make India attractive as a market, the most compelling reason for investors to be in India is that it provides a high Return on Investment. India is a free market democracy with a legal and regulatory framework that rewards free enterprise, entrepreneurship and risk taking. Budget 2011-12 for Infrastructure: A strong emphasis on infrastructure is clearly visible in the budget. Allocation for infrastructure stands at 48.5% of Gross Budgetary Support to plan expenditure. The focus has been two pronged especially increasing refinancing through Indian Infrastructure Financial Corporation (IIFCL) while focusing on current national level infrastructure projects. IIFCL is expected to achieve a cumulative disbursement target of Rs 20000cr by March 31, 2011 and Rs. 25000cr by March 31, 2012. In addition, FM proposed to allow tax free bonds of Rs. 30000cr to boost infrastructure development in railways, ports, housing and highways. Special Economic Zone (SEZ) is a geographical region that has economic and other laws that are more free-market-oriented than a country's typical or national laws. "Nationwide" laws may be suspended inside a special economic zone. Publicprivate partnership (PPP) involves a contract between a public sector authority and a private party, in which the private party provides a public service or project and assumes substantial financial, technical and operational risk in the project. Infrastructure Development in AP: Andhra Pradesh Industrial Infrastructure Corporation Ltd. (APIIC) was incorporated on 26th September, hol1973 with Authorized Capital of Rs.20.00 crores and paid up capital of Rs.16.33 crores. APIIC is a w ly owned Undertaking of Government of Andhra Pradesh. With the advent of economic liberalization the Corporation has reoriented itself to the changing needs of economy and assumed the role of facilitator. APIIC vested with the objective of providing industrial infrastructure through the development of industrial areas, the Corporation has so far developed more than 300 industrial parks areas spreading over an extent of about 1,21,655 acres(including allotted area). Besides, the Corporation is also developing sector focused parks like apparel park/food processing parks/leather parks, SEZs in the state. The Corporation has also constructed 3500 industrial sheds, 4800 dormitory units, 466 commercial shops. Why Andhra Pradesh? I choose Andhra Pradesh for my research study due to its dominant role in the SEZ & PPP Hyderabad is ranked as the No. 1 Indian ITES destination by NASSCOM Ranks second in the number of industrial estates in the country Only state with abundant energy Several world-class academic institutions with foreign collaborations Accounts for about 23 per cent of software professionals in India Second largest storehouse of minerals in the country
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PPP projects: PPP is new concept in creation of public infrastructure which is successful concept in the world, especially in developing countries like Brazil, Mexico, and Indonesia etc.,. STATE WISE FIGURES Total Number of Projects based on value of contracts Total Based Between Between More States Number of on 100 100 to 251 to 500 than Value of Projects crore 250 crore crore 500 crore contacts Andhra Pradesh 96 1484.6 2197.8 7,062.3 56,173.7 66,918.3 Assam 4 54.0 337.2 391.2 Bihar 6 77.6 769.6 1,246.7 2,093.8 Chandigarh 2 75.0 75.0 Chhattisgarh 4 70.0 304.0 464.0 0 838.0 Delhi 13 95.0 109.4 738.2 10374.0 11316.6 Goa 2 30.0 220.0 250.0 Gujarat 63 304.1 2,013.2 4,138.9 33,181.0 39,637.2 Haryana 10 125.0 180.0 270.0 10,588.1 11,163.1 Jammu and Kashmir 3 6,319.8 6,319.8 Jharkhand 9 131.0 550.0 398.0 625.1 1,704.1 Karnataka 104 1,080.4 1,942.6 13,136.3 28,499.6 44,658.9 Kerala 32 338.7 206.3 1,235.0 20,501.5 22,281.5 Madhya Pradesh 86 1,977.6 3,930.3 3,397.2 5,678.3 14,983.4 Maharashtra 78 742.3 2,988.4 2,433.7 39,427.6 45,592.0 Meghalaya 2 226.1 536.0 762.1 Orissa 27 235.1 211.0 1,473.0 11,430.6 13,349.7 Pudducherry 2 419.0 2,947.8 3,366.8 Punjab 29 732.8 1,552.7 572.0 705.0 3,562.5 Rajasthan 59 633.9 783.8 1,100.8 12,508.8 15,027.3 Sikkim 24 175.6 558.0 2669.0 13708.0 17110.6 Tamil Nadu 43 267.9 355.6 8,905.2 9,100.0 18,628.6 Uttar Pradesh 14 1,458.6 25,137.2 26,595.8 Uttarakhand 2 43.0 478.0 521.0 West Bengal 30 638.0 965.7 1,714.4 3,299.1 6,617.1 Inter-State 14 160.5 195.0 2,474.4 6,738.0 9,567.8 Total 758 9,471.9 19,826.9 55,307.5 298,725.8 383,332.1 (Source: http://www.pppinindia.com/database.php)

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SEZ s in the Andhra Pradesh: Operational SEZs: State Utara Pradesh Gujarat Maharashtra Karnataka Tamilnadu Andhra Pradesh No. of SEZs 7 11 15 19 20 31

(Source:http://www.sezindia.nic.in/writereaddata/pdf/ListofoperationalSEZs.pdf) SEZs: State wise Distribution: Sectors Formal approvals Andhra Pradesh 109 Chandigarh 2 Chhattisgarh 2 Delhi 3 Dadra &Nagar Haveli 3 Goa 7 Gujarat 45 Haryana 46 Himachal Pradesh 0 Jharkhand 1 Karnataka 58 Kerala 28 Madhya Pradesh 15 Maharashtra 104 Nagaland 2 Orissa 11 Pondicherry 1 Punjab 8 Rajasthan 10 Tamil Nadu 71 Uttar Pradesh 34 Uttarakhand 2 West Bengal 23 GRAND TOTAL 585

In-principle approvals 5 0 1 0 0 0 5 3 0 0 1 0 2 14 0 0 1 0 1 5 1 0 3 42

Notified SEZs 75 2 0 0 1 3 29 35 0 1 36 20 6 63 1 6 0 2 9 57 21 2 12 381

(Source: http://www.sezindia.nic.in/writereaddata/pdf/StatewiseDistribution-SEZ.pdf) Formal approvals and Notified SEZs as on 13.05.09 SEZ in India: An Index-based Critical Perspective Faculty Contributor: Rupa Chanda, Professor IIM-B Andhra Pradesh is the fourth largest economy in the country. At national level, the state stands first in the generation of hydroelectric power. According to the predictions of 2007-2008, its
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gross state domestic product (GSDP) at constant prices is projected to record a growth of 10.37 percent. During the 11th Five Year Plan (2007-2012), the state is focusing on 9 percent annual economic growth. The states' GSDP growth averaged 6.8 percent during 2002-07. Its major thriving fields have been IT, pharmaceuticals, biotech, outsourcing, electronic hardware, textiles, and mining. 2. Literature Review A nations infrastructure development plays a significant role in its economic growth. A fast growing economy warrants an even faster development of infrastructure (John 2008) Special Economic Zone Benefits derived from SEZ is evident from the investment, employment, exports and infrastructural development additional generation (M.Banumathi- SEZ an instrument of Economic Development) one of the strong argument for establishing SEZ is that the zones will generate high level of direct and indirect employment (VK. Srinivasan, PS Sundaram) and one of the declared goals of SEZ scheme is promotion of investments from domestic and foreign sources (VK Srinivasan, PS Sundaram) Publicprivate partnership (PPP) Limited resources of the state Government do not permit to fulfill the public demand for qualitative and quantities improvement in providing basic physical and social infrastructure to the people (Sukanta Chandra Swain) Creation of public infrastructure is crucial for development process but poor countries/ states struggle for arranging fund for the same, PPP is such a mode which helps in construction and operation of infrastructure services in a win-win situation (Sukanta, Chandra Swain) Planning commission has estimated PPP across all infrastructure sectors for 10th and 11th plans .for the 11th plan original projection for the total infrastructure sector has estimated the share 30% (G.Raghuram) Projects sponsors- directly or through SPVs (Special Purpose Vehicle) have securitized revenues to refinance projects as well as raise additional funds for investment in other projects (Cherian Thomas) India is second fastest growing economy in the world. Indias recent investments infrastructure as follows:

Infrastructure is broadly divided into the Social infrastructure and physical infrastructure
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Purpose of Study: In recent past emphasis on infrastructure development is significant for its requirement for simultaneous development with other sectors. It became as a competitive edge over with in the business environment now it is era of Development of infrastructure for India. They are applying every possible way to create it and build the nation on par with the rest of the world. So I felt it is worth of putting my efforts to draw a new insight in this field. 3. Objectives: Analyze the impact of SEZ & PPP on economic development of Andhra Pradesh during the period of 2000 to 2012. To determine the correlation between infrastructure development and Economic growth Difference in living standards of people before PPP/ SEZ projects and after PPP / SEZ projects Determine the proportionate change in the per-capita income of the people 4. Hypothesis of the study: Null Hypothesis: There is no significant relationship between SEZ, PPP and Economy development of Andhra Pradesh Alternate Hypothesis: There is significant relationship between SEZ, PPP and Economic Development of Andhra Pradesh 5. Methodology Data source: Data will be collected primarily from the Andhra Pradesh SEZ & PPP Primary data will be collected from the employees involved in SEZ to understand the effect of SEZs on Standard of living of people). Secondary data will be collected from the websites of official bodies such as http://www.ppp.ap.gov.in, www.pppinindia.com, www.sezindia.nic.in, Correlated with the AP Data Collection Method Data collects in questionnaire method in three types, top level, middle level and lower level employees Questionnaire includes their back ground, location, education, family description, earlier work experience and satisfaction of the job. Data will be collected in systematic sample method from throughout the AP in different SEZs and PPPs and analyzed its financial performance of the same. Data Analytical Tools Economic Development of AP and its factors like demand supply, inflation, polices related to the Monitory, regulatory and other related effects are analyzed Creation of direct and indirect employment and its impact on living standards of the local people To analysis the data t test and z test will be used with help of SPSS software 6. Chapterization: Chapter 1 Introduction Chapter 2 Literature Review Chapter 3 Methodology Chapter 4 Data Analysis Chapter 5 Findings Chapter 6 Conclusions & Suggestions
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7. Conclusion Concept of SEZ and PPP is drastic change on the financial arena of the country; it is rapid growth when we compared in history.

Exports from the functioning SEZs during the last three years are as under
Year Value (Rs. Crore) Growth Rate ( over previous year )

2003-2004 2004-2005 2005-2006 2006-20007 2007-2008 2008-2009 2009-2010

13,854 18,314 22 840 34,615 66,638 99,689 2,20,711.39

39% 32% 25% 52% 93% 50% 121.40%

(Source: http://www.sezindia.nic.in/about-ep.asp) 8. References M. Banumathi: SEZ in India chinas way of development (P. Arunachalam) VK Srinivasan, PS Sundaram: International experience and Indian scenario Sukanta Chandra Swain: The ICFAI University Journal of Infrastructure Dec-2009 G.Raghuram: India Infrastructure Aug-2010 (Journal) Cherian Thomas: Head IDFC- India Infrastructure Journal SEZ in India: An Index-based Critical Perspective: Faculty Contributor: Rupa Chanda, Professor IIMB article SEZs in India (Lessons from China) Geeta Das http://sezindia.nic.in/index.asp, http://apit.ap.gov.in/index.php/it-promotion/it-sezs-in-ap http://www.hyd.stpi.in/sez/faq.html www.pppinindia.com http://www.apiic.in/

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