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This paper presents a simple yet efficient proximity sensor obtained by combining inductive and capacitive sensing principles. Capacitive proximity sensors based on shielding of electric field are known for detecting presence of humans in its vicinity. Such systems may fail to distinguish the proximity of a human from grounded conductive objects. A novel, cost effective, sensing scheme that uses a single sensor, which performs both the inductive and capacitive proximity mode of operation is proposed in this paper. The measurement system uses a signal conditioning unit based on a carrier frequency principle. A prototype sensing system has been built and its application as a seat occupancy sensing system in a vehicle has been verified. The developed system successfully senses human proximity and distinguishes it from other conductive objects.