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Special Economic Zone

Special Economic Zones (SEZs) are geographical regions with more liberal economic laws than the country to attract foreign and domestic investment. The SEZ Act of 2005 aims to generate economic activity, promote exports and investment, and provide employment and infrastructure development opportunities. While SEZs have created jobs and increased exports, farming communities criticize the acquisition of fertile land and some see real estate developers misusing tax concessions without creating desired jobs. The government is now restricting fertile land acquisition and limiting SEZ size and non-export construction to address such criticism.

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44 views1 page

Special Economic Zone

Special Economic Zones (SEZs) are geographical regions with more liberal economic laws than the country to attract foreign and domestic investment. The SEZ Act of 2005 aims to generate economic activity, promote exports and investment, and provide employment and infrastructure development opportunities. While SEZs have created jobs and increased exports, farming communities criticize the acquisition of fertile land and some see real estate developers misusing tax concessions without creating desired jobs. The government is now restricting fertile land acquisition and limiting SEZ size and non-export construction to address such criticism.

Uploaded by

minnale92
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Special Economic Zone

A special economic zone is a geographical region where economic laws are more liberal than the country's
general economic laws. The purpose of SEZ is to attract foreign and domestic investment both.
SEZ Act
The SEZ act 2005 was passed by the Parliament in May 2005 which received Presidents assent on 23rd June
2005. And finally it came into effect on 10th February 2006.
The objectives of this act are as follows:
Generation of additional economic activity.
Promotion of export of goods and services.
Promotion of investment from domestic and foreign sources.
Providing employment opportunities.
Advancement and development of infrastructural facilities. As per the recent available data, formal approvals
have been granted for setting up of 584SEZs, Out of which 381 have been notified. And a total of 133 SEZs
are making exports. Out of which 76 are IT related, 17 multi products and 40 are from other sector.
Impact/Benefits of SEZ
SEZs have played an important role in the creation of direct as well as indirect employment.
Overwhelming response is seen among the investors, both in India and abroad.
Increase in earning of foreign exchange and infrastructure development.
Contribution in human development facilities such as education, healthcare, social life etc.
Criticism
The farming community is criticizing the government of acquiring fertile land from them at heavily
discounted price.
Critics say that the policy is being misused mainly by real estate developers rather than exporters.
Companies are shifting to SEZs just to seek advantage of the tax concession and not creating jobs as desired
Government's Initiatives in response to the criticism
Acquisition of fertile land is being restricted.
The size of SEZs being limited.
Space allowed within SEZ for construction of shopping malls, housing is also being restricted.

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