Introduction Of Sez
- 1. Special Economic Zones A Brief Presentation by: ZEESHAN SHAHZAD KHURRAM
- 2. What is an SEZ? “….it is a specifically delineated duty- free enclave and shall deemed to be a foreign territory for the purposes of trade operations and duties and tariffs” The purpose - “... to provide an internationally competitive and hassle-free environment for exports”
- 3. a background it started with the Export Processing Zones in the mid 1960s a total of 8 export processing zones established to boost export and manufacturing – Kandla and Surat (Gujarat), SEEPZ –(Maharashtra), Chennai (Tamil Nadu), Falta(West Bengal), Noida(UP), Cochin (kerala), Vishakhapatnam (AP) in 2000 the SEZ policy was brought in to attract more investments – foreign and domestic; state policies were made In 2005 SEZ Act and in February 2006 the SEZ rules were notified by the Ministry of Commerce
- 4. what is special? duty-free! exemption from taxes, various subsidies and tax sops hassle-free! exemption from stringent labour and environment regulations land acquisition upto 1000 ha Only 25% of the area for industrial activity – the rest of the area for entertainment and residential as well as other commercial activities!
- 5. Present status of SEZ 150 SEZ are already approved and another 240 SEZ applications are under the process of approval. 85 are in for IT and ITES 14 for pharma and Biotechnology 9 for textile and apparels 10 for multi product SEZ’s
- 6. Functional SEZs at present At present there are eight functional SEZs located at: SantaCruz (Maharashtra), Cochin (Kerala), Kandla and Surat (Gujarat), Chennai (Tamil Nadu), Visakhapatnam (Andhra Pradesh), Falta (West Bengal) & Nodia (Uttar Pradesh) in India. Further a SEZ at Indore (Madhya Pradesh ) is now ready for operation.
- 7. Advantages Generation of additional economic activity Promotion of exports of goods and services Promotion of investment from domestic and foreign sources Creation of employment Development of infrastructure facilities
- 8. Advantages Simplified procedures for development, operation, and maintenance of the Special Economic Zones and for setting up units and conducting business Exemption from import duty, VAT and other Taxes A vibrant industrial city with abundant supply of skilled manpower. Pollution free environment with proper drainage and sewage system
- 9. Disadvantages Loss of revenue Land acquisition No strategic planning for electicity and water Creating pollution Exploitation of labours Fertile lands being used for establishing industrial units
- 10. Conclusion Four things are important : The government must slow down the process of giving approvals. This is important not only for social or political reasons but also due to economic realities. Legal institutions related to land acquisition ( including land acquisition modalities, compensation package and rehabilitation package) must be addressed. Introduce a performance based exit policy for SEZ developers Finally, the policy should be treated as transitory.