Journal Press India^®

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The model of Special Economic Zone (SEZ) was introduced in India with the primary objective of increasing exports, attracting investment, generating employment and enhancing economic activity. After passage of the SEZ Act in 2006, SEZs started mushrooming with proposals of huge investment. However, things didn’t move as smoothly as expected. Over a period of time, many SEZs have either been de-notified or have asked for several extensions to implement their project citing various reasons including delay in approvals from statutory bodies, withdrawal of tax incentives and delay in environmental clearance. In this backdrop, this paper explains the relationship among select macroeconomic variables (per capita net State Domestic Product, availability of industrial land, availability of skilled labour, gap in demand-supply of electricty and capital formation by government) that are likely to impact SEZ investment. Employing multiple regression analysis, the results show that selected independent variables are significant determinants for investment decision in SEZs in the State of Karnataka.

Keywords

Special economic zones; Investment in Karnataka; Investment determinants in SEZ; SEZ; India.

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