Special Economic Zones -SEZ
India is a growing economy and wants to make most of it in terms of foreign exchange. The intension behind SEZ seems to be logical but has developed certain road blocks in some regions.
SEZ is a region or part of a state which has economic laws that are more liberal than the country’s normal economic laws. These zones enjoy tax exemptions from the government for a period of time, subsidized water and electricity. In simple words, these economics zones are given special treatment or concessions probably till they establish. Special economic zones are developed in large area (100 to 200 acres) of which one part is meant for business units and the rest of area for housing, schooling and other facilities. The main aim of SEZ is to increase foreign investment.
The concept of SEZ was founded by Zeng Xiaoping of China in the 1980s. In China this concept was successful and Shenzen, a small village was developed into a city with a population over 10 million in 20 years. This example was followed in counties like Brazil and Jordan. India is in the fug stage of developing such SEZ.
Considering the need to increase foreign investments, production and exports and the need of a ‘level playing field’ for the domestic manufactures, to be competitive globally, the government of India in April 2000. announced the introduction of SEZ policy. By 2007. 500 SEZs were proposed and out of that 220 SEZ have been created. A SEZ act was also passed in 2005.
The government policy allows setting up of SEZs in private, public or joint sector or by state government. Special economic zones cover the free trade zones, export processing zones, industrial estates and free ports. So. the government of India has convened the existing 8 export processing zones to SEZs. Compared to export processing zones, SEZs are much liberalized.
Though some SEZs are functional, some are facing problems in the starting phase itself. The government acquires land from locals and sells it to the interested parties for exorbitant amount. This process has come under criticism. Also, great protests have been taking place in some regions of Bengal due to the wrong methods of land acquisition for setting SEZs. Especially, protests from the farming community for taking their agricultural lands for discounted prices. So, protests in states regarding the planning and development of SEZs has forced the government and state governments rethink and put a hold to further plans.
After addressing the worrying issues SEZ may Be able to flourish and sustain.