KARNATAKA
- Second largest state in concentration of EOUs in the country and contributes 20% of all India exports from EOUs.
Introduction:
Export
Oriented Unit Scheme, popularly known as
was introduced by Government of India in 1981.
The main objective of the EOU Scheme is to promote exports so as to
earn foreign exchange for the country.
In
the country’s efforts to improve foreign trade 100% EOU’s have played a
significant role. One of the
schemes, which the government devised to improve exports and thereby move on
to higher levels of industrial and technological progress, is the Export
Processing Scheme. All
industrial units offering 100% of their production for exports (except the
permitted domestic sales) and registered under the Scheme fall into this
category. Though these units were restricted to a defined geographical
zone in the initial stages, they were later allowed to be set up outside the
zones also. 100% EOUs are
classified into the following 3 categories, all enjoying almost identical
benefits and incentives.
-
Units in Export Processing Zones (EPZs) and Special Economic Zones (SEZs)
-
100% EOUS established anywhere in India.
-
Units sets up under Software Technology Parks (STPs) and Electronic Hardware Technology Parks (EHTPs) schemes for development of computer software and Electronic Hardware.
The
essence of the EOU scheme is that units are allowed to customs-bond their
premises, and to import all their requirements for export production into
that area duty-free. To
encourage linkages with the hinterland, inputs and capital goods from the
domestic market are also provided free of excise duties and sales / purchase
taxes to EOUs. This measure
also helps the EOUs to be more competitive internationally.
The
Export Oriented Unit Scheme has the same provisions as that of the Export
Processing Zone (EPZ) scheme with one notable difference:
EPZs are walled-in enclaves providing infrastructure and on – site
customs clearances, whereas EOUs can be set up anywhere in the country
taking into account factors like source of raw materials, ports, comparative
advantage in manufacture, infrastructural facilities, availability of
technological skills, existence of ancillary / complementary industry, need
for a larger area for the project, etc.
The
Special Economic Zones (SEZs) are a more
refined version of the EPZs. The
export Oriented Unit Scheme, Export Processing Zone and Special Economic
Zones schemes are run by the Department of Commerce, Ministry of Commerce
& Industry, Government of India. The
department directly runs 3 Special Economic Zones at Cochin, Mumbai and
Kandla, and 4 Export Processing Zones at Chennai, Falta, Vizag and Noida at
present. In addition, the
Department has accorded in-principle approval to several new generation
special economic zones, including for one in Hassan, Karnataka.
The
success of the schemes depends largely on the co-operation of Customs and
Central Excise Departments, as they extended the formal clearances to the
EOUs.
The
Department of Commerce has divided the country into 7 Zones for tending to
the Eous. EOUs in Karnataka are
looked after by the Development Commissioner, Cochin Special Economic Zone
from an office in Bangalore since 1991.
Karnataka
has the second largest concentration of EOUs in the country. Out of the
little over 1500 units in India, Karnataka alone has about 236 units
(Excluding about 1000 STP units exporting Rs. 10,000 crores of software)
accounting for exports of more than Rs. 3,500 crores.
The chief contributors are garments, minerals, electronics, textiles.
Export
Growth from Karnataka scored much higher rate than the national growth:
EOUs contribute more than Rs. 18,700 crores exports which is about
10% of the country’s exports. Karnataka’s EOUs generated exports of Rs.
3500 Crores (Provisional) in 2001-2002, out of which ready-made garments has
contributed Rs. 1015 crores. There
was tremendous growth in EOUs and their contribution from the year 1991,
when there were just 63 units with exports of Rs. 450 crores.
In the year 2001-2002, exports from Karnataka EOUs grew at 18% year
– on- year, compared to a much lower rate for the country as a whole.
Karnataka’s contribution to total exports from EOUs in India is around
20%..
Role
in Employment Generation:
The total investment
involved in the EOUs in Karnataka is Rs. 2,278 crores.
These EOUs generate direct employment of about 37,000 people.
The indirect employment is estimated to be at least 10 times more. Karnataka
EOUs span a whole range of sophisticated industries. Among the more important sectors are Garments, Minerals,
Electronics, Textiles, Software, Agro & Food Processing, Engineering and
Services.
Separate
EOU Division at Bangalore Customs:
Since most of the EOUs
are located in Bangalore, Customs have a separate EOU Division.
This is the only such division in the whole country.
Some
of the major benefits and incentives enjoyed by EOUs are duty free import /
local purchase of the required capital goods and raw materials, income tax
holiday, 100% foreign equity participation under RBI’s automatic route,
State tax concessions and more favorable treatment in all regulatory
requirements.
Meeting
the imperative needs of strengthening the foreign trade of the country, EOUs
are bound to be strengthened and enabled to achieve greater heights in
contributing to the economic growth of the country. Some of the important
expectations of the EOUs are: Further
liberalization and autonomy of operations. Comparatively
more attractive benefits and incentives to EOUs Relief
from some of the uncomfortable, State laws, like labour laws, Pollution
control laws, ESI, Contract labor Act, etc. Improvement
in infrastructure, including power. A
separate Export Promotion Council for EOUs supported by government.
