Customer Satisfaction of MEPZ-Special Economic Zone

By Ganapathi, R.; Malar, S. Anbu | Asia-Pacific Business Review, January-March 2008 | Go to article overview

Customer Satisfaction of MEPZ-Special Economic Zone

Ganapathi, R., Malar, S. Anbu, Asia-Pacific Business Review

India is rich in human resources. An effective utilization of human resources can boost the development of India. Hence, both Central Government and State Governments have prepare the number of plans for the economic development. Among the many plans, one of the plans is establishment of Special Economic Zone (SEZ). The very purpose of establishing SEZ is providing all infrastructural facilities, marketing assistance, financial assistance and incentives in all aspects. If all the facilities are provided, certainly, many entrepreneurs may come forward to establish their units in SEZ voluntarily. Mainly labour intensive units are established in SEZ for the benefit of the local area people. Some of the existing Export Processing Zones are converted into Special Economic Zones. One such is Madras Export Processing Zone (MEPZ) which got converted into Special Economic Zone. The researchers wanted to know the impact of conversion on the functioning of the units within the zone area. Many more multinational corporations are very much interested in establishing their sister concerns and branches in India. Hence, it is the need of the hour to know the functioning of units in Special Economic Zones. The present study highlights the ways of functioning of units in SEZ erstwhile called MEPZ.


It is one of the biggest controversies that India has seen in its economic history and it refuses to die down soon. Of late, each time a Special Economic Zone (SEZ) is announced, it runs into trouble with various groups, within and outside the government. So what exactly is the trigger for the controversy? Are SEZs as is being pointed out, the drivers of the economic engine or the tools for further exploitation of the poor? Each side has its own debate to put forth. India Times looks at both angles to the issue and wonders whether a middle path can be achieved. According to Aseem Shrivastava (2007), "SEZ is a specially demarcated area of land, owned and operated by a private developer, deemed to be foreign territory for the purposes of trade, duties and tariffs with the intent of increasing exports. Within the SEZ production can be carried out by investing companies utilizing a large number of concessions--Tax exemptions, guaranteed infrastructure and the relaxation of labour and environmental standards".

One of the earliest and most famous SEZs were established in China in the early 1980s. The most successful SEZ in China, Shenzhen, has developed from a small village into a city with a population of over 10 million within 20 years. Following the Chinese examples, SEZs have been established in several countries including Pakistan, India, Iran, Jordan, Poland, the Philippines, Russia and Ukraine. According to World Bank estimates, as of 2007 there are more than 3,000 projects taking place in SEZs in 120 countries worldwide. Considering the need to enhance foreign investment and promote exports from the country and realizing the need that a level playing field must be made available to the domestic enterprises and manufacturers to be competitive globally, the Government of India had in April 2000 announced the introduction of Special Economic Zone policy in the country. As of 2007, more than 500 SEZs have been proposed, of which 220 have been created as of date. This has raised the concern of the World Bank, which questions the sustainability of such a large number of SEZs.

Importance of the Study

Acquisition of technological capability through special economic zones: Many Asian countries have adopted the special economic zones. This popularity is to foster and stimulate the economic development. Encouraged by the success of SEZ in other Asian countries in the 1960's and 1970's, China set up four SEZ in 1979, including one in Shenzhen. As a result of its extraordinary growth and success, Shenzhen SEZ has become itself a positive example and impetus for the rest of the world. Although a large number of SEZs are already in operation around the globe, it is likely that a growing number of SEZs will continue to flourish both in Asia and elsewhere. …

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