One of the biggest failures of Indian Economy is that it has not been very successful in establishing employment-intensive industries. Can the proposed Coastal Employment Zones bring substantial success towards this? Discuss highlighting the salient features of Coastal Employment Zones.

In recent years, India has seen jobless growth whereby the employment growth was around 2 lakhs per year, much below the desired value. NITI Aayog has proposed Coastal Employment Zones (CEZ) – one on eastern coast and other on western. The key features of these zones are as follows:

  • They would be created in 400-500 km² with clusters for manufacturing forms.
  • They would seek to boost growth through export and employment intensive manufacturing.
  • They will be provided with swift decisions on application of environmental clearance and speedy water and electricity connection.
  • Each Coastal Economic Zone would create urban spaces as residential provision for those employed in the zone.
  • Social subsidies would be re-oriented in such a way that beneficiaries become independent.

Coastal Employment zones would be beneficial as:

  • 73% of the employment in manufacturing sector is in informal establishments as per Asian Development Bank report in India. This would create jobs in formal sector.
  • Absorption of those being skilled under various schemes under Skill India.
  • Cluster approach would help reap the benefit of economies of scale and agglomeration economy.
  • Rising wages in china, has led to job diversion to Vietnam, Bangladesh. Zone would help grab this opportunity.
  • Location of manufacturing units make exports from India competitive due to decrease in logistics cost.

Challenges to these CEZs stem from:

  • Government’s flagship programme Make in India have failed to attract tangible investments.
  • Previous attempt to generate jobs through Special economic zones has failed and is being seen as land grabbing exercise by farmers.
  • Land acquisition for such a large project would be a major hurdle.
  • Slow world economic growth is suppressing growth of exports and export market already dominated by China and East Asian economies.
  • Designing of zones need to keep in mind efficient waste management or else can lead to rise of marine pollution.
  • Manufacturing units along coast may have greater risk of exposure to natural disasters like cyclone especially along eastern coast.
  • Success of these zones would depend on their ability to attract large investments from manufacturing firms and export competitiveness of product which would require policies that.
Question for UPSC Mains:
"One of the biggest failures of Indian Economy is that it has not been very successful in establishing employment-intensive industries." Can the proposed Coastal Employment Zones bring substantial success towards this? Discuss highlighting the salient features of Coastal Employment Zones.

Published: September 25, 2017 | Modified:June 27, 2019

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