Evaluating the Economic Impact of Special Economic Zones (SEZs) on the Development of Uttar Pradesh’s Economy: A Comprehensive Analysis

Abstract

Special Economic Zones (SEZs) have been widely adopted as a policy tool for promoting economic development in emerging economies. This research investigates the economic impact of Special Economic Zones (SEZs) on the development of Uttar Pradesh's economy, with insights drawn from global experiences. The study employs multiple regression analysis, coupled with assumptions for the reliability of the regression model and the CUSUM test to assess the stability of the model. Data spanning from 2009-10 to 2022-23 was obtained from the office of the Noida Special Economic Zone, the Ministry of Commerce website, and the Uttar Pradesh Export Promotion website. The analysis reveals that SEZ exports have a significant positive influence on Uttar Pradesh's GDP. As SEZ exports increase, there is a corresponding rise in the state's GDP. Furthermore, SEZ-related employment in Uttar Pradesh has also been found to substantially impact the state's economic growth, underscoring the importance of job creation for both societal well-being and economic development. The findings highlight that exports and employment are critical drivers of economic growth in Uttar Pradesh. A surge in exports reflects heightened economic activity, generating foreign exchange revenue that can support imports, service foreign debt, and maintain currency stability. Additionally, export-oriented industries often adopt modern technologies to meet international standards, resulting in productivity gains and technological advancements that benefit the broader economy. This study underscores the pivotal role of SEZs in fostering economic development and stability in Uttar Pradesh.