Now you are the Development Commissioner for Telangana, Andhra Pradesh and Chhattisgarh for the Special Economic Zones (SEZ). So, can you give us an insight into how is the SEZ development in these 3 regions that you are managing?
Just to give you a brief about the Special Economic Zones. The first Special Economic Zone was started in Kandla in 1965 which was inaugurated by the then honorable Prime Minister Lal Bahadur Shastri. Later on, the SEZs started coming up in the entire country and Vishakhapatnam Special Economic Zone is the youngest and was the 7th one to be set up in the country in 1989, that is almost after 24 years of setting up the first SEZ in the country, and Vishakhapatnam Special Economic Zone started its existence in the name of Vishakhapatnam Export Processing Zone. It was set up over an area of 360.5 acres at Vishakhapatnam, about 20 kilometers from Vishakhapatnam capital city and very close to Duvvada railway station. Actually, later on, the export processing zones have been converted to special economic zones with the promulgation of the SEZ Act in 2005. Earlier it used to be only in the government sector that is Government of India used to set up SEZ. Thereafter, this has been extended to the state government run SEZs and also private SEZs. So our VSEZ has been made a zonal Special Economic Zone with its jurisdiction over 3 states, AP, Telangana and Chhattisgarh and also the union territory Yanam. Though we don’t have much activity in Yanam due to various reasons and also similarly in Chhattisgarh, where the Special Economic Zones have not been shown much interest due to various reasons. The most happening states under VSEZare AP and Telangana. As far as Telangana is concerned, it is highly happening state for the IT and ITES, that is Information Technology and Information Technology Enabled Services. Similarly, if you look at Andhra Pradesh, it’s basically the merchandize sector which is taking up heavily in Andhra Pradesh. If you look at, there are 36 SEZs in Telangana and 24 in Andhra Pradesh and 1 in Chattishgarh, out of total 61, and similarly if you look at, an SEZ will have some units. In VSEZ there are 61 SEZs comprising of 526 units. We just have a breakup of these units in the states.
You have got 366 units operational in Telangana and 159 in Andhra Pradesh and 1 in Chhattisgarh. So, if you look at the breakup, there are more number of IT units in Telangana, like 323 and there are only 37 units in Andhra Pradesh, and if you come to the merchandize part considering the tangible products, where as in the IT/ITES sector no tangible product is made. Only services are made, softwares are developed and software services are given to the countries abroad, all over the world. So, if you come to the merchandize part, the Telangana has got 43 units, whereas Andhra Pradesh has got 122 units and because as you know that IT sector gives lot of employment, in Telangana, 73% of the units are located in Telangana and 26 in Andhra Pradesh. I am giving breakup in terms of percentage and if you look at the employment, 83% of the employment is generated in Telangana and 17% in Andhra Pradesh because IT sector, like if you just look at an example, Infosys employs more than 26,000 employees. If you look at the merchandize sector in Andhra Pradesh, even the biggest what I consider, brand, employs only 19000. If you come to the investment side both Andhra Pradesh and Telangana are on par, like in Andhra Pradesh, it is 46% and Telangana it is 54%, out of 64,148 crores being pumped into SEZs and if you look at the exports, 80% of the exports come from Telangana and 20% from Andhra Pradesh because as you know that IT/ITES sector contributes a lot to the exports, it is to the tune of almost 69% of the total exports.
Very interesting profile and insights into the SEZ development across this 3 regions. We will get into the details little bit later. Let me first talk about Vishakhapatnam SEZ per se itself. So, I understand that recently VSEZ has celebrated 32nd zone formation day and you have been there at the helm of affairs I think for the last 2 to 3 years. What happened in the last 2 to 3 years, how was the growth and what are the developments that happened?
I am very happy and proud to share that we have celebrated our 32nd zone formation day on 15th March 2021. As rightly pointed out by you, I have been here at the helm of the affairs for the past just more than 2 years. I joined as Development Commissioner at Vishakhapatnam at 11th of March 2019. So, exactly I have completed 2 years and we are very proud to announce that in the last 2 to 3 years, our contribution has been amazingly achievable. It is very difficult to achieve such kind of results in just 2 years. Like in 2018-2019, that’s at the end of 2019 when I joined, the exports were to the tune of 74,747 crores. In just one year, when Corona had not yet started its influence on us, in 2019-2020, on March 2020, our exports touched 96,886. That means in just one year of my career at VSEZ, we could reach the growth rate of 32.79% and now after that all of you know that the corona had a very bad impact on all the industry, country-wide, world-wide, state-wide, it has not spared any sector in the globe, and of course, fortunately, we struggled and we could still achieve a growth during 2020-2021 also. You will be surprised to know that this is a year of pride for us where we have crossed 1 trillion rupees mark of exports and at the end of March, I got latest figures online with me, and we have achieved exports to the tune of rupees 1,058,68 crores, this is equivalent to 14.8% growth in just one year, during corona when it was in peak, whereas the whole of SEZs in the country put together have recorded a growth of -1.26% but VSEZ has recorded a growth of 14.8%. So, that way, I am very happy to share this to you and in the last 2 years, as told by you, we have achieved a growth of 41.2% in just 2 years, starting from 1st April 2019 to 31st March 2021, that’s exactly two years and our growth has been phenomenal and we have achieved a growth of 41.2%.
That’s a really amazing. I should compliment you. While the whole world is reeling under this pandemic, it is heartening to know that VSEZ has progressed well, showing the record growth rates but can you give me an insight in what actually contributed to this growth, which were the factors that drove this growth?
I strongly believe that there is no shortcut to success. During corona, though all my office staff were kept away from the offices, but we were always working. I was always attending the office during those days and fortunately if you look at the sectorial distribution of industries under VSEZ, 69% of the contribution to the exports comes from IT/ITES and 19% comes from chemical and pharmaceutical. Rest 4% from food and similarly engineering products 1.23/%. The total if you look at, more than 91% comes from all these 4 sectors which have recorded all positive growth. As you know that the corona could not touch us in IT sector as all the persons were working from home and they were providing all services to the US…. IT/ITES sector to all the countries abroad they were working from and we have facilitated them by relaxing the rules, providing them permission to carry their systems to their homes and start working from there. That has happened when 15 April started, all the industries were closed…our units started operating again and similarly there was luckily an exemption for the pharmaceutical units and industries, pharmaceutical SEZs; we had an exemption that after forming standard operating procedures of Corona and social distancing and other things, we have quickly started our pharma SEZ within next 1 week to 10 days, we have started all our units. We have got some exemption for food and other things. So, that way, we had coffee SEZ, Indus coffee, Continental Coffee is there, there are certain coffee which was being exported even during Corona also. So, these things firstly saved and our quick action to restart, has helped us a lot and all our customs officers were always available at the SEZs to clear the exports and we coordinated with our ministries, the Ministry of Commerce, and Ministry of External Affairs, Ministry of Home, and Ministry of Pharma to get permissions for export of pharmaceutical products as everybody knew that there was lot of demand of hydroxychloroquine. At that time, fortunately, we had 2 to 3 units which were making hydroxychloroquine under VSEZ.
Luckily after coordinating with the Ministry of Pharma, we have exported more than 11.47 million hydroxychloroquine to various countries including USA, Malawi, South Africa and Singapore, we have exported by air. We have airlifted all these things and secondly, the best motto of our VSEZ is that you do your business, we take care of the rest. We very scrupulously follow these motto and we allowed people to do their business and we have always facilitated. Second one is the ease of doing business that helped them a lot and almost we cleared all the requirements of the units during lockdown also, working from. Now we have got certain timings from 9:30 to 5:30, that time we had no timing. We were working round the clock, 10 ‘o clock, 11 ‘o clock, we were working and we were providing approvals, we were allowing all the units to operate by taking feedback from them, how many employees will be working after giving return approvals for them to restart their operations, that way we have made all 489 units operational within just 15 days of the lockdown out of 526 units. I believe all these things and the complete team work of the VSEZ, that includes the customs officers, our VSEZ team, our ADCs, JDCs, GDCs, all our team we were very very synchronously working to help the units and that way we could achieve. It is one zone in the country that has recorded a positive growth, just to tell you, there are 7 zones in the country starting from North, if you start from Noida, Kandla, then come to Cochin, then Chennai, Mumbai and Kolkata. So, just you can scan through the records of the NSTL which is the data maintaining agency of the Department of Commerce. You will see that Vishakhapatnam has recorded positive in both merchandize and services. This was all possible due to hard work, nothing else.
Okay, if any entrepreneur wants to set up an export facility, what is the process and in all the 3 states, still there is some scope for the export units to come?
There is lot of scope and we have been giving approvals for the units and just to tell you, last year, when corona was not there 20199-2020, we approved 90 units in just one year, which was the highest figure again in the history of SEZ and during corona also, we have accorded approvals for 17 new units to be setup under SEZ and 7 export oriented units were approved and 8 units asked for expansion, whether people think that all the units are closing down, they asked for expansion and we have approved even the expansions also. The process involves a simple application and we will tell you we don’t require much, very simple, PAN card, Aadhaar card, your company name, registered with GST, certain formalities. We will ensure to give you better space or we will give you an open space or if you are going to a private SEZ, we will ask you to get an allotment letter from the private SEZ. If you are approaching TSISC or APISC, we will ask, they are called the developers and we ask the unit, please procure one NOC and allotment letter from them that they are ready to give you the space, we that we will ask them to submit a project report and within one month, I assure you, even below that time, we will give you an approval over single window clearance, all the officers meet together once in a month, that is called Unit Approval Committee Meeting where all the important department representatives will represent, the matter will be discussed there and the unit will present their proposals and our only requirement is that, you should be capable of generating some employment and showing exports and capable of earning net for an exchange, we are interested in earning net for an exchange for the nation. That is why we are here, SEZs are here, and similarly we have to generate employment.
I tell you, under VSEZ, the employment generated today is 3,93,000, this is the direct employment who are on rolls of the units and indirect employment will be almost 2 to 2.1 times of this. Our job is to build infrastructure in the area to contribute to the overall development and create some economic activity.
After IT/ITES services and pharma, which are the most promising export units that are coming up, in your knowledge, that is one. Second, how is the connectivity, logistics part of it for the existing SEZs?
Mr. Ravi, actually all the SEZs are setup, first looking that the logistics only. Like if you look at, we are very close to the airports here. Airport as well as seaport and are well connected by railway lines and it is the case with all the SEZs other than IT/ITES. They can work from anywhere and they can contribute to the foreign exchange and that way, SEZs are setup. The scenario has totally changed. Prior to the corona pandemic, the sectors were, we had apparel sector, it was quite promising, Brandex was doing extremely well, and then had Apache, it was making Adidas shoes, it was also very promising. We had leather industries, they were promising and we have got diamonds, worldwide diamond under the sorting, manufacturing, then polishing and dong job work, they are all very promising. We have got very very outstanding SEZs. Our SEZ is there even in GMR airport, they are providing services for the MRO, Maintenance, Repair and Overhauling of the flights which are coming from abroad. See, basically, wherever there is an SEZ, its meant for earning foreign exchange so all the things which are coming from foreign, they are serviced. We don’t cater to the domestic or local markets. So, these are all promising. Now during pandemic you can see that the promising were only 4, which have saved us from an embarrassing situation, in terms of exports.
You have achieved a very wonderful growth rates at these SEZs. So going forward, what is your vision for this Vishakhapatnam SEZ?
At the beginning of year 2020, we projected and I assured that we will definitely reach 12% minimum growth and today, I am proud to say that we have achieved 14.8% growth. I still promise that we will achieve next year, this year also and if the things improve, this second and third wave of corona doesn’t’ effect, we are very hopeful that at SEZs, we have got a great discipline because SEZs are specially delineated zones, we are bounded by compound walls, secured gates, infrastructure inside, we provide all facilities to them at very affordable prices, we provide security, roads, water, electricity, everything at very affordable prices in the SEZ and even ETP, Effluent Treatment Plants are there and we are allowing them to go for solar plants also, their own power generation plants, they are there, So, with all these facilities, the SEZs can still outperform even if the corona is affected because we are working in a very controlled environment, so every entry inside the SEZ is recorded, every entry going outside the SEZ is recorded and the best part of SEZ is that there is least interference of the offices from the local administration, everything goes by self-declaration and only sample checking is done, what are you exporting and once you export something from here, it will be checked up only in the airport or seaport or when it is coming also, it will be checked up only in the seaport and SEZ, and similarly, our officers are very cooperative and that way, the entrepreneurs who are coming to the SEZs, they are facilitated so much that there is no routine checks and similarly no labour activity, like unionism is not permitted inside the SEZ. I am very proud to say in 2 years of my time here, not even a single kind of strike, hartal, lockout has taken place despite there are 526 units operational here. So, that way, I hope that SEZs will continue to contribute and I tell you, all the SEZs of the country contributed to the tune of 7.86 lakh crore out of 21.3 lakh crore exports from the whole country, that means SEZs are contributing to one-third of the exports from the country. So, we are saving lot of foreign exchange, earning lot of foreign exchange of the country. Our only criteria may be, we will review your performance after 5 years and if you are achieving foreign exchange, that is, if you are importing something and exporting something, your exports are more than imports, we welcome you, you start doing work with us and don’t expect that we will cater to the local markets, that is not encouraged here, we are here to encourage our exports and build our image in the whole of the globe and maintain the balance of the debts, payment and attract foreign investment inside the country and provide lot of employment to the country, bringing awareness among our country entrepreneurs that there is something like SEZ because most of the people they do not understand the concept of SEZ, they don’t distinguish between an industry and SEZ, so they are very vaguely used, whenever an industrial area is coming up, they will say an SEZ is being setup, but in SEZ you have the privilege of importing everything without paying taxes, you can import everything from the local market, you are not charged iwht GST..if you are using diesel, excise duty is charged, you are given so many benefits in SEZ, only to encourage the entrepreneurs to earn the foreign exchange for the nation. We welcome all the entrepreneurs to VSEZ and we assure you that within one month, we will make your unit operational.
