DPK Agr

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SEZ
SPEcial ECONOMIC ZONE
A BRIEF DISCUSSION ON SPECIAL ECONOMIC ZONES IN INDIA
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SEZ
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DEFINITION
A Special Economic Zone (SEZ) is a

geographical region that has economic laws
that are more liberal than a country's typical
economic laws.
A special economic zone is also an area
which has multiple benefits in terms of the
taxes and duties exemptions enjoyed.
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INTRODUCTION
 India was one of the first in Asia to recognize the

effectiveness of the Export Processing Zone (EPZ)
 Model in promoting exports, with Asia's first EPZ
set up in Kandla in 1965.
 The Special Economic Zones (SEZs) Policy was
announced in April 2000.
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Continue
 This policy intended to make SEZs an engine for

economic growth supported by quality infrastructure
 It was complemented by an attractive fiscal package,
both at the Centre and the State level.
 The Special Economic Zones Act, 2005, was passed
by Parliament in May, 2005.
 It received Presidential assent on the 23rd of June,
2005.
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OBJECTIVES
The main objectives of the SEZ Act are:

 Generation of additional economic activity
 Promotion of exports of goods and services
 Promotion of investment from domestic and
foreign sources;
 Creation of employment opportunities
 Development of infrastructure facilities
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FACILITIES AND INCENTIVES
 Duty free imports.

 100% Income Tax exemption on export income for SEZ units
under Section 10AA of the Income Tax Act for first 5 years,
 50% for next 5 years thereafter and 50% of the ploughed
back export profit for next 5 years.
 Exemption from minimum alternate tax under section 115JB
of the Income Tax Act. .
 Exemption from Central Sales Tax.
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EXPORT PERFORMANCE
Exports from the functioning SEZs during the last three

years are as under:
YEAR VALUE (RS. CRORE) GROWTH RATE (%)
2003-2004 13854 39
2004-2005 18,314 32

2005-2006 22 840 25
2006-2007 34,615 52
2007-2008 66,638 93
2008-2009 99,689 50
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MAJOR OPERATIONAL SEZS IN INDIA
Exports from SEZs established by Central Government
NO. STATE NAME OF SEZs LOCATION STAT TYPE
WISE E
1. 1 Kandla Special Economic Kandla, Gujarat GJ Multi product

Zone
2. 2 SEEPZ Special Economic MUMBAI MH Electronics,Ge
Zone MAHARASTRA ms,Jewellery
3. 3 Noida Special Economic Uttar Pradesh UP Multi product
Zone
4. 4 MEPZ Special Economic Chennai, TN Multi product
Zone Tamil Nadu
5. 5 Cochin Special Economic Cochin, Kerala KL Multi product
Zone
6. 6 Falta Special Economic Falta, WB Multi product
Zone West Bengal
7. 7 Visakhapatnam SEZ Vishakhapatnam AP Multi product
Page  11 Andhra Pradesh
State Govt. /Private SEZs notified prior to SEZ Act, 2005
NO STATE Name of SEZs Location Stat type
WISE e
1 1 Surat Special Economic Surat GJ MULTI PRODUCT
Zone
2 2 Manikanchan SEZ, Kolkatta WB Gems and
Jewellery
3 3 Jaipur SEZ Jaipur RJ Gems and
Jewellery
4 4 Indore SEZ Pithampur MP MULTI PRODUCT
5 5 Jodhpur SEZ JODHPUR RJ Handicrafts
6 6 Salt Lake Electronic City - KOLKATA WB Software dev ,
WIPRO ITES
7 7 Mahindra City SEZ (IT), TAMIL NADU TN IT/Hardware and
Bioinformatics
8 8 Nokia SEZ Sriperumbudur TN TC EQ./R&D

Services
9 9 Moradabad SEZ MORADABAD UP Handicrafts
10Page 10
12 Surat Apparel Park SURAT GJ Apparel
BENEFITS
 Economic development, especially if the country is an export-
driven one, this will fuel economic growth.
 Country's GNP would rise, if the terms of trade is beneficial.
 Higher output, employment and standard of living for its
citizens
 Understanding and goodwill, special economic zones would
forge closer ties between the countries as they become more
inter-dependent.
 Economies of scale
 Product cheaper
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CONTENTIOUS ISSUES
 Land Grabbing at very low prices.

 If SEZ built on agricultural land the farmers will loose their
livelihood
 They are not skilled laborers it would to tough to relocate
them to other jobs.
 Already Farmers are having very bad days in India, one of the
leading agriculture countries.
 Tax holidays would create a burden on the finance ministry.
 Huge downward impact on Tax: GDP ratio & the common
man have to pay the price of it.
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Page  1

A Special Economic Zone (SEZ) is a

 India was one of the first in Asia to recognize the

 This policy intended to make SEZs an engine for

The main objectives of the SEZ Act are:

 Duty free imports.

Exports from the functioning SEZs during the last three

1. 1 Kandla Special Economic Kandla, Gujarat GJ Multi product

8 8 Nokia SEZ Sriperumbudur TN TC EQ./R&D

 Land Grabbing at very low prices.

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