- The Northeast region’s experience with SEZs has been fraught with difficulties and missed chances.
- Despite the region’s approval of five SEZs between 2007 and 2021, none have become operational.
Overview of NE Unoperational SEZs
- IT SEZs that have yet to be realised: The paper highlights the delays in constructing IT SEZs in Manipur and Sikkim, which were both approved in 2013 and 2021, respectively.
- Nagaland’s Unfulfilled Promise: Despite approvals dating back to 2007-9, Nagaland’s SEZs sit idle, indicating a wasted chance for economic progress.
- Zone of Potential Agro-Products: The Tripura agro-products zone, which was sanctioned in 2019, is yet to materialise, showing the necessity for coordinated efforts to remove obstacles.
What are SEZs?
- Distinctive Zones: A Special Economic Zone is a territory unique from the rest of the country in terms of trade and business restrictions.
- Economic Goals: SEZs seek to improve trade balance, attract investment, create jobs, facilitate efficient administration, and accelerate economic progress.
- SEZs provide specific financial policies that include investment, taxation, customs, trading, quotas, and labour laws.
- Tax Breaks: Businesses in SEZs may be eligible for tax breaks, which are periods of reduced taxation upon establishment within the zone.
SEZs are being established in India.
- EPZs: India pioneered the concept of Export Processing Zones (EPZs), with the first EPZ in Asia constructed in Kandla in 1965.
- The SEZ policy in India was implemented on April 1, 2000, with the goal of increasing foreign investment and establishing a globally competitive environment for exports.
- The policy’s goals were to increase exports, level the playing field for domestic businesses, and establish a complete legal framework for SEZ development and operation.
- Regulatory Framework: The SEZ Act of 2005 established a regulatory framework that covers critical features of SEZs and the units that operate within them.
Diverse Zone Types:
- SEZs include a variety of zones such as free-trade zones (FTZs), export processing zones (EPZs), industrial estates (IEs), free ports, and more.
- SEZs attract foreign direct investment (FDI) from multinational companies (MNCs) and worldwide firms, boosting economic growth.
Creating SEZs
- An SEZ can be established by any private, public, joint sector, state government, or its agencies.
- Foreign Participation: Foreign agencies may also set up SEZs in India.
- States’ Role: Within inter-ministerial committees on private SEZs, state government representatives provide consultations on proposals.
- Infrastructure Provision: Before recommending SEZ plans, state administrations must ensure the availability of critical resources such as water and power.
- Labour Laws: SEZs follow standard labour laws, which are enforced by individual state governments, with a focus on streamlining procedures and implementing single-window clearance.
Benefits provided
- Economic Benefits: SEZs strive to streamline corporate processes, improve infrastructure, and provide tax breaks, hence encouraging FDI and export growth.
- Trade Growth: SEZs contribute greatly to India’s exports by fostering production and export-oriented activities.
- Attraction of multinational Investors: The liberalisation of restrictions and access to modern infrastructure in SEZs entices multinational investors looking to capitalise on export-driven possibilities.
@the end
- The parliamentary report is a rallying cry for addressing the stalling of SEZs in Northeast India and turning obstacles into possibilities.
- It emphasises the significance of developing a new industrial development strategy that is sensitive to the dynamics of the region.
- The administration has the opportunity to not only correct the existing situation but also contribute to the inclusive economic prosperity of the entire nation by harnessing the Northeast’s unique capabilities.
Source: https://www.sciencedirect.com/science/article/abs/pii/S0016718519303549