Vartika Misra, Advocate
Abstract
This research paper seeks to delve into the concept of Special Economic Zones (SEZ) as recognised under The Special Economic Zones Act, 2005, and attempts to look at the prevailing condition of SEZs to arrive at a conclusion whether it's model as adopted by India, will be successful in our domestic environment. No matter how good the concept of SEZ might appear prima facie, it is rightly said by Sir Winston Churchill, ' However beautiful the strategy, you should occasionally look at the results.' SEZs are provided with various incentives in the form of tax exemptions by Central Government and several other benefits like freedom from imposition of customs duty and other tariffs that are otherwise applicable across the nation. Despite conferment of such benefits, current trends show that performance of SEZs has been less than significant and suboptimal. The current statics as depicted on the official Government Portal of Ministry of Commerce & Industry, Department of Commerce1 portrays a grim picture. According to Export Performances tabular representation on the official website, the export performance of SEZs went down from 31% in 2012-13 to a significant decline of 4% in 2013-14 with corresponding export trade values going down from US $88.18bn to US $82.35 respectively. According to a report by Comptroller & Auditor General (CAG)2 for the year 2012-13, released in 2014, only 38.78 percent of the approved SEZs become operational after their notification. 52 percent of the land allotted remained idle even though the approval dated back to 2006. Land acquired for SEZS was subsequently diverted (up to 100% in some cases) after de-notification. These records do not paint an optimistic future of SEZs in our nation, the problems which lead to such crisis will be discussed and possible solutions to counter them will be provided by way of this research.
Some of the issues that act as impediments in the path of its development are less geographical area being allocated for setting up of such zones, poor location in terms of its proximity with border areas to facilitate easier export services, less advanced transportation methods etc. However, their implementation, lies in the hands of the concerned authorities, which brings us back to the theme of this research paper that deals with fate of SEZ in our country.
Thus, to sum it up all in one sentence, it wouldn't be wrong to quote Wilbur Ross, who believes, ' It's important to have a sound idea, but the really important thing is the implementation.'
This paper attempts to understand the theme and for the said purpose has been segregated into some parts which is similar to a piecemeal approach to a problem. Part I provides an introduction to SEZ, Part II deals with the history, Part III deals with performance of various SEZs within the country. Part IV elucidates the problem associated with SEZ in our nation and Part V is the main component which carefully weighs the possibilities of encountering the problem to determine whether SEZs have been successful and if they'll be successful in the long run.
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