Special Economic Zone (SEZ) - Road ahead...

Governments plans to setup Special Economic zone(SEZ) has sparked off widespread debatein public, especially farmers.Whether its Nadigram, Singur in West Bengal or Raigad in Maharashtra or Dadri in UP there is wide spread opposition in setting up SEZ...

What is an SEZ?

SEZ are created for the purpose of attracting huge investment, there by creating job oppurtunities in designated sites. They enjoy the following privileges..

1. Its exempt from Income Tax, Service Tax and Sales Tax

2. Enjoys freedom to sub-contract

3. No examination of import/export cargo by customs.

Current status of SEZ - Facts

Number approved - 237 in 19 states

Notified zones ( land acquired ) : 63

Cleared in principle - 166

Operational - 23 ( 18 in IT sector )

In the pipeline - 500

POSITIVES.....

1. creates 30 lakh jobs

2. Annual turnover of 15,00,000cr

3. 2 % contribution to GDP by 2010

4. Exports will cross $500 billion by 20155.

5. Creates pockets of prosperity in rural areas there by helping to slow down migration to urban areas

NEGATIVES...

1. Results in land scams due to policy loopholes

2. Huge revenue loss due to several incentives. Exchequer will loose 1 lakh crore in next 4 years owing to tax and duty exemptions for SEZ

3. Diverting famrland to SEZ will put pressure on Agriculture


Kamalnath is in favor of SEZ whereas Chidambaram, Sharad Pawar and Jairam Ramesh have reservations about SEZ implementation...

Concerns are more about the policy and the manner in which its implemented. The major concern is thousands of hectares of fertile land being diverted to SEZ. This will reduce arable land and can put brakes on India doubling its food production over the next decade. A/c to Land Acqisition act 1894, state is the ultimate owner of the land and can take over it for public purpose by paying reasonable compensation. But compensation levels are too low.

No one oppose underlying philosophy behind SEZ. No one denies that SEZ will lead to huge social and economic benefits. Its a critical policy tool to make India a truly global superpower. Government is awaiting Mukherjee panel report on SEZ so that clear cut implementation policy which is benefitial to all becomes a reality.