CEZs in the making

If things move swiftly, the country's first Coastal Economic Zone (CEZ) will come up in Andhra Pradesh. Visakhapatnam, Machilipatnam, Donakonda, Krishnapatnam or Srikalahasti-Yerpedu are among the places that the state government is scouting for to locate the zone.
According to sources, setting up the Coastal Economic Zone will be one of the major topics in the agenda of National Institution for Transforming India (NITI Aayog) vice-chairman Aravind Panagariya when he visits Amaravati and holds discussions with chief minister Chandrababu Naidu and other senior officials. The talks will mainly focus on taking inputs from the state government's proposals and requests on the location of the CEZ.
The first CEZs in the world came up in Shenzhen and Guangzhou provinces in China. These are spread across 2,500 sq km each. The proposed CEZs in the country including the first one in Andhra Pradesh will be much bigger in size than the Special Economic Zones (SEZ) that have come up across the country.
The CEZs will come up around 450 km of area from the sea and will house big manufacturing, export-oriented units, labour-intensive industries manufacturing clothing, footwear, electronics as well as electrical manufacturing. Among the many locations, Krishnapatnam in Nellore district appears to be the best location for the CEZ as it has the required port infrastructure to support import and export facility as well availability of land aplenty. “Being close to Rayalaseema, a CEZ in Krishnapatnam can turn into a job hub for the region,“ said sources.
Panagariya in his note to the state government said in the context of the Sagaramala project (connecting all ports in the country), creating a Shenzhen style of CEZ in the western and eastern coast will boost economic activity and increase employment,“ said the sources.
Andhra Pradesh government will present the scope for the CEZ and seek the support of the Centre in creating infrastructure, upgradations of ports as well as a liberal export regime. NITI Aayog had earlier said that a tax holiday period can be considered for firms that can create a threshold level of direct employment (50,000 jobs). Within one CEZ, many sector specific zones and clusters can emerge. Apart from AP, Gujarat is also actively considering setting up a CEZ. Apart from support for the setting up of the CEZ, the AP government will request the NITI Aayog team to provide similar incentives that come in as part of special status for the industries to be set up in Prakasam and Kurnool districts as plenty of government land is available in these two districts.
“For the CEZ and other projects, AP will seek policies similar to that of China which provide 10 years exemption of corporate tax,“ said officials. According to them, the state government is looking for incentives and other funds support be the tune of Rs.2.5 lakh crore.

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