CHENNAI: Special Economic Zones (SEZs) were to generate economic activity and create employment. But as per the last count, the country has more non-functional than operational SEZs, indicating the reduced appetite of investors to do business from these zones.
In all, there are 430 SEZs, of which 204 are functional, while 226 remain non-starters. Exports from those up and running SEZs are also on a southward trajectory. From a high of `4.9 lakh crore in FY14, exports saw a de-growth in FY15 at `4.62 lakh crore. The following fiscal saw a marginal growth of 0.77% at `4.7 lakh crore. Also, the government identified 29 SEZs that were reported as fraud, on which appropriate action was initiated. Some of these cases include high-profile companies like HTC Global Services (India), and Tata International Ltd.
“The slowdown in
SEZ exports is due to a number of reasons including withdrawal of exemption of Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) provisions, uncertain fiscal regime for SEZs, global factors etc,” said Nirmala Sitharaman, Minister of State for Commerce & Industry in a reply to a question in the Lok Sabha.
She added that review of functioning of SEZs was an on-going process and that government takes measures to facilitate speedy and effective implementation, including, review meetings with the Development Commissioners, open house meetings with stakeholders and others.
The top five states with total number of SEZs include Karnataka with 61, followed by Maharashtra (60), Tamil Nadu (53), Telangana (53) and Gujarat with 34. The SEZ policy was first announced in 2000 to attract large foreign and domestic investments. By offering quality infrastructure, attractive fiscal package both at centre and state level, and minimum regulations, the government’s intention was to make SEZs an engine for economic growth. Consequently, the SEZ Act was passed in 2005 with simplified procedures including single window clearances to promote exports of goods and services. It was expected to trigger large inflows, create production capacities leading to additional economic activity. As on FY16, the operational SEZs saw Rs 3.76 lakh crore investments and created nearly 16 lakh jobs.
Source : newindianexpress.com