Riding the crest of SEZ wave

SEZs are the fastest way to create jobs since companies are in a hurry to establish their units, writes GC Shekhar.

At the Nokia factory at Sriperumbudur, 30 kms from Chennai, 19-year-old Devi puts a fully assembled Nokia handset into the test machine before it goes down the assembly line for packing.

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Hailing from Tambaram, a Chennai suburb, Devi was doing odd jobs after completing high school, before being recruited for the Nokia assembly line by a recruiting agency. After a month of training she is now among the permanent employees who takes home Rs.4,000 apart from other incentive payments. Her breakfast, lunch and transport to and from the plant are taken care of by the Finnish giant. Till a few months ago Devi would not have imagined that she would be an end beneficiary of the country’s Special Economic Zone (SEZ) policy under which foreign companies are invited to set shop in India with a slew of tax incentives. “But for the SEZ policy Nokia would not have been in India as it would have been more profitable for us to put up another facility in China,” admitted Jukka Lehtela, Director of Nokia’s India Operations. Eyeing the booming Indian mobile market (6 million new subscribers enrolled last month alone , more than Finalnd’s population of 5.5 million) Nokia is investing US$ 150 million here .After three years 20,000 people will be employed by Nokia with its vendors setting up base around the mother unit. While all this will definitely bring the price of handsets down, still better news will be the new jobs being created for other Devis in Chennai and nearby towns.

Lehtela estimates that after Flextronics, Dell and Samsung start full operations by 2008 in this SEZ corridor on the Chennai-Bangalore Highway, at least 50,000 people would find direct employment. “The scope for indirect employment by way of transport, catering, maintenance and even roadside mechanics is unimaginable,” observed A. Gururaj, Director and General Manager of Indian Operations for Felxtronics. When completed Flextronics will shift most of its operations from Bangalore and all from Pondicherry to the new SEZ. While other SEZs in Haryana and Punjab are stuck in controversies about whether fertile agricultural land is being grabbed, Tamil Nadu is fortunate that most SEZs are coming up on barren lands acquired by the state agencies a decade ago. In the past six months, the government has signed six MoUs under SEZ inviting an investment of Rs 2,750 crore. Another 45 have been approved and 22 are pending proving that the state is spearheading the SEZ wave.

“By our calculation at least 5 lakh jobs will be created by SEZs as early as December 2007," said union minister of commerce and industry Kamal Nath. “SEZs are the fastest way to create jobs since companies are in a hurry to establish their units and commence production to make full use of the concessions."

Email gc_s@yahoo.com