Alternative to Setu channel: Marine Economic Zones

via S.Kalyanaraman published on December 24, 2007

Swadeshi fishermen cooperatives network to improve marine peoples’ livelihood

It is suggested that the Setu Channel project should be given up. Instead a Marine Economic Zone should be announced for the Tamilnadu/Kerala coasts.Total value of marine products exported during 2006-7 was Rs. 8,363.53 crores.

About 25% of this foreign exchange earning, or over Rs. 2,000 crores foreign exchange is earned by exports from five districts north and south of Rama Setu: Nagapattinam, Thiruvarur, Pudukottai, Ramanathapuram, Thuthukudi, Kanyakumari. This Marine Economic Zone supports the livelihood of over 20 lakh people dependent upon sustainable development of these marine products.
There is potential to increase this to Rs. 10,000 crores per annum. A working Group constituted by Ministry of Agriculture in August 1990 had revaildated the fishery resource potential of Indian EEZ at 3.9 million tonnes of which 2.21 million tonnes are within a region of depth upto 50 mtrs. It is found that the resource within 50 mtrs.depth regions is at present exploited to the optimum level. The resource potential beyound 50 mtrs. is estimated at 1.69 million tonnes. Some of the commercially important resources uder exploitated beyond 50 mtrs. depth regions are tuna(2.09 lakhs tonnes), Tunnies (2.42 lakh tonnes), Ribbon fish (2.16 lakh tonnes), Perches(1.25 lakh tonnes), Cat fish (0.63 lakhs tonnes) etc.
Pamban gap already exists (with a cantilever bridge) to link Gulf of Mannar and Palkbay for fishing vessels to navigate between Kochi/Kanyakumari and Nagapattinam/Cuddalore and beyond. Small vessels with 11 ft. draught can use this channel for navigation and to carry marine products and catches of fish-landings.

Fish landings have increased almost five-fold in the last 40 years since 1963 according to the statistics. If these increased landings are effectively harnessed through Marine Economic Zones along the long coastline of Bharatam, a veritable revolution can be achieved contributing to abhyudayam of coastal people and contribute to the nation’s development.

Marine Economic Zone on either side of Rama Setu coast will, thus, be an effective alternative to the project disaster, the Setu channel project.

Nature magazine in its issue of 6 Sept. 2007 has reported that another tsunami is likely to occur along the sundaplate thrust, a tsunami which will be more devastating than the 26 Dec. 2004 tsunami, putting at risk 6 to 7 crore people along the Bharatam coastline from Bay of Bengal through Palkbay/Gulf of Mannar to the Kerala coast.

It is our responsibility to start preparing for coping with such an unprecended natural disaster that has been warned by the scientists. All projects along the coastline should be subjected to safety review immediately.

What is a Marine Economic Zone?

Objective of MEZ is to generate marine economic activity and employment.

MEZ will trigger a flow of domestic investment in infrastructure and productive capacity.

Marine fisheries within the territorial waters are the subject of maritime states whereas fisheries beyond this limit within the EEZ fall in the jurisdiction of Central Government. The Central Government besides playing an advisory role also provides funding support to the States/Union Territories for implementation of Central Sector and Centrally Sponsored Schemes. The declaration of Exclusive Economic Zone in 1976 facilitated exploration, exploitation and utilization of marine living resources in the sea around India extending to 200 nautical miles, thereby giving the nation immense opportunities and challenges to harvest the resources and to manage them on sound scientific basis. MEZ will be a central scheme with funding directly provided to the MEZs which should function as autonomous institutions led by a Board composed of members drawn from the coastal communities. States’ contributions will be in the nature of complementary governance activities and state services related to law and order, maintenance of road networks and civic amenities.

MEZ will involve the build up of infrastructure of housing, medical services and schools for the direct benefit of the coastal marine communities.

Central Government should provide direct insurance cover to the fisherfolk engaged in the risky activity of fishing on high-seas of the Indian Ocean (including Arabian Sea and Bay of Bengal).

Marine Economic Zones along this Bharatam coast in Tamilnadu, will have to be formulated forthwith with complete involvement of the marine people. Agriculture, textiles and marine products are the lifeline of the nation’s economy. Marine economy has been neglected by all governments. It is time that people start a movement all along the marine economic zones to make a break from this lack of attention and prepare projects for abhyudayam of the marine people.

Marine Economic Zone (MEZ) is different from Special Economic Zone (SEZ).

MEZ is swadeshi, while SEZ is intended to promote foreign investment
MEZ is meant for using marine resources, while SEZ replaces cultivable land to promote industry. MEZ does NOT involve any displacement of any existing industry.
MEZ is a cooperative of small fishermen and small-scale marine product processing sector on the long coastline of Bharat, while SEZ is a concentrated large-scale activity creating an industrial megapolis.

The key components of MEZ are:

•Generation of additional economic activity using the five-fold increase in fish landings along the coastline of Bharat.
•promotion of exports of marine products and services
•promotion of investment from domestic sources
•creation of employment opportunities
•development of infrastructure facilities by increased numbers of fishing harbours and fishing vessels, equipment, cold-storage facilities and marine product processing industries

Fiscal package for MEZ

MEZ needs an attractive fiscal package both at the Centre and the State levels. This package should be comparable to the fiscal package offered for SEZ.

On the same lines of rules/incentives provided for SEZ, the MEZ Rules should provide for :

Simplified procedures for development, operation, and maintenance of the Marine Economic Zones and for setting up units and conducting business in MEZs;

Single window clearance for setting up of an MEZ with a MEZ Board of Approval (BOA) composed of leaders from the coastal communities.;

Single window clearance for setting up a unit in a Marine Economic Zone;

Single Window clearance on matters relating to Central as well as State Governments;

Simplified compliance procedures and documentation with an emphasis on self certification

Foreign investments should be encouraged only where the domestic investors require specific areas of technical collaboration not available within the country.

Incentives and facilities for MEZ

The incentives and facilities offered to the units in MEZs for attracting investments into the MEZs:-

Duty free import/domestic procurement of goods for development, operation and maintenance of MEZ units

100% Income Tax exemption on export income for MEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.

Exemption from minimum alternate tax under section 115JB of the Income Tax Act.

External commercial borrowing by MEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.

Exemption from Central Sales Tax.

Exemption from Service Tax.

Single window clearance for Central and State level approvals.

Exemption from State sales tax and other levies as extended by the respective State Governments.

The major incentives and facilities available to MEZ developers include:-
Exemption from customs/excise duties for development of MEZs for authorized operations approved by the BOA.

Income Tax exemption on export income for a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act.

Exemption from minimum alternate tax under Section 115 JB of the Income Tax Act.

Exemption from dividend distribution tax under Section 115O of the Income Tax Act.

Exemption from Central Sales Tax (CST).

Exemption from Service Tax (Section 7, 26 and Second Schedule of the MEZ Act).

India’s Marine Policy: glorious statements of intent and reality of dismal performance
India is one of the world’s largest maritime nations, with a coastline of over 7500 kms and our marine policy as articulated in the Ocean Policy Statement of 1981 and subsequently amplified in the Vision Pespective Plan 2015. The Mission Statement is:

“To improve our understanding of the Ocean, specifically the Indian Ocean, for sustainable development of ocean resources, improving livelihood, and timely warning of coastal hazards, that will make India an exemplary steward of her people and ocean.”

This Mission which has been further developed in successive Five-Year Plan Documents, seeks to improve our understanding of ocean processes through implementing long term observational programmes by using state-of-the-art marine technology so that

– Our knowledge of the Indian Ocean and its inter-related processes improves.
– We are better able to assess the living and non-living resources in our seas, with a view to their sustainable utilisation.
– Our coastal areas are managed in an integrated manner.
– We are able to forge partnerships with our Indian Ocean neighbours having regard to the act that it is the same waters which wash all our shores.
– The interests of India and the Indian Ocean are secured in regional and international bodies.
Looking Ahead

The world’s oceans are in peril but the recuperative powers of mother nature are so miraculous that aided and assisted by the marvels of modern science and technology, much can still be recovered. An enlightened marine policy adopted by the nations of the world, which eschews the ruthless plundering of the oceans’ resources, and instead encourages their sustainable utilisation, will enable us to beqeath to future generations the amazing diversity and wondrous beauty of the oceans with all its riches. In the words of the Vision Document, “in the final analysis it is the question of proper stewardship that remains at the heart of the legacy of the ocean.”

Marine Economic Zone Policy

The Geographic base of Indian marine fisheries has 8118 km. coastline, 2.02 million sq. km. of Exclusive Economic Zone (EEZ) including 0.5 million sq. km. of continental shelf and 3937 fishing villages.

The objective is to increase the facilities available for marine people five-fold in the next 5 years.

There are 1896 traditional fish landing centres, 33 minor fishing harbours and 6 major fishing harbours which serve as bases for about 2,08,000 traditional non-motorized craft, 55,000 small scale beach-landing craft fitted with outboard motors, 51250 mechanized craft (mainly bottom trawlers and purse-seiners) and 180 deep sea fishing vessels and out of which 80 are in operation.

The small-mechanised sector would be encouraged by providing incentives for acquisition of multi-day fishing units.

Deep sea vessels would be provided with infrastructure support in terms of landing and berthing facilities. The vessels, which are landing quality fish for export would be provided with suitable incentive as in other export oriented agri-ventures.

The post-harvest infrastructure consists of freezing plants, canning plants, ice making plants, fishmeal plants, cold storage and peeling sheds which together cater to a sizable labour force of one million people engaged in fishing and another 0.8 million in post-harvest operations.

A large number of fin fish and shell fish stock principally consisting of sardines, Bombay-duck, ribbonfish Indian mackerel, coastal tunas, seer fishes, penaeid and non-penaeid shrimps, stomatopoda, cephalopods, croakers, threadfin breams, silver bellies and carangids trevallies, leather jackets, scads and horse mackerel are exploited using different craft and gear combinations. Presently the estimated average annual landing of fish and shellfish is around 28 lakh tonnes.
Export Production through Marine Capture Fishery

Deep Sea Fishing

In 1986 Government of India revised its Deep Sea Fishing Policy giving more stress to joint ventures in deep sea fishing. In 1991 Government of India further modified the deep fishing policy encouraging long lease of fishing vessels and permitting test fishing as prelude to joint venture. Subsequent to the recent economic liberalisation conditions for foreign equity premitted in the case of a deep sea fishing policy are as

•New or second hand vessels can be acquired on lease.
•The vessels should be for non-shrimp resource.
•Deep sea fishing project can be registered under 100% EOU scheme.
•Test fishing may be done to establish techno-economic viability.
•Foreign collaboration involving foreign equity upto 51% is generally permitted. Foreign equity once invested is considered on par with Indian share holding.
•Foreign equity can be by way of fishing vessels also.
•Services of foreign crew can be availed.
•Mid sea bunkering is permitted .

The revised 1986 Charter Policy was pronounced envisaged acquisition of vessels by the Indian Companies either through import / construction in India or through joint venture etc. As a result of the above Charter Policy, 97 companies were permitted to operate 311 foreign fishing vessels. Besides augmenting the marine fish production in the country, the policy also facilitated greater inflow of foreign exchange through export of fish caught by these vessels. All these vessels were operating on 100% EOU basis.

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