Waseem Ahmad BhatAIR 7 · CSE 2022 · 270 wordsTheir whole copy
Opening · a constitutional or legal provision
India has allowed & incentivised building of Special Economic Zones (SEZs) under SEZ Act, 2006.
Currently there are around more than 335 SEZs in India.
⇒ Significant role in Exports
⊙ Huge potential as currently India has low percentage of world trade access. e.g: Only around 1.67% of merchandise exports of world are Indian and only around 3.5% of service exports are Indian.
⊙ Agglomeration economies of the SEZs can lead to huge productivity increase
and quality goods & services.
Body · points
→ currently Indian productivity is only 1/3rd of China's.
Close · a way forward
⊙ Free & reduced taxation and other law laws provide for more room for innovation & more exports.
⊙ Zero export levies → to incentivise them.
⇒ Issues
⊙ Reduction of loss of benefits : Most benefits under IT Act, 1961, have been taken back. similarly other benefits have been taken back.
⊙ Most of them are in services (Around 70% are IT/ITES based) → less employment.
⊙ Huge unutilized land → currently at around 25,000 hectares.
⊙ They are small in India (even < 500 ha) as compared to China (> even 50,000 ha).
⊙ Regulatory issues as government has created a developmental model based on partnerships which private sectors is not keen on.
⊙ Confusion of nomenclature e.g: Coastal SEZs, NIMZs, etc.
⇒ Measures needed
Baba Kalyani Committee has provided the following:
⊙ Transit from focus on Exports to focus on 3Es — Employment, Exports & Economic growth.
⊙ Provide free partnership model.
⊙ Separate the rules of Service SEZs & manufacturing ones.
⊙ Clarity of nomenclature needed.
This way they can transform Indian economy into a developed one.
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