Abstract
Special Economic Zones (SEZs) has been the growth engine of many developing countries around the world for the last few decades. The SEZ Scheme was introduced to provide a special area to expertise in international trade by providing an attractive fiscal package both in central and state government level with little regulations. SEZs have made Indian economy compatible with the global economy. The SEZ Act 2005 was passed with a view to increase the pace of economic growth. So far the Government of India (GOI) has given formal approval to 491 SEZs in which 199 SEZs already started exporting, out of which majority are from IT/ITES, pharmaceuticals and chemical sectors. GOI came forward with a lot of incentives for attracting investors to the scheme. The newly elected NDA government is seriously looking for the development of SEZs. The performance of Indian SEZs in the post-SEZ Act era has been gaining attention; it shows a tremendous increase in export, investment and employment. This paper is an attempt to study the performance of SEZ in India and its impact on India's export, investment and employment. In addition to this, the recent government initiatives in terms of privileges, tax exemptions, rebates, policy initiatives to improve the performance of SEZ are also addressed in this paper. For the extensive analysis of this study, data were collected from the Ministry of Commerce and Industry, Ministry of Finance, Reserve Bank of India and from various websites and newspapers.
Highlights
Free Trade Zones is not a new phenomenon; different countries started implementing the concept of free trade zones three centuries ago
The SEZ policy was announced in 2000 by the Government of India (GOI) with a view to overcome the shortcomings of the EPZ scheme
The growth of export in the sectors like Pharmaceuticals and chemicals, gems and jewelry and IT/ITES and electronic hardware uplift the total export of SEZs since the SEZ Act
Summary
Free Trade Zones is not a new phenomenon; different countries started implementing the concept of free trade zones three centuries ago. Another six export processing zones were set up in different parts of the country during 90’s. EPZ Scheme was not successful in the Indian perspective as it was in other developing countries like China, Taiwan, Singapore, etc. There were no committed policy initiatives towards this scheme like other developing countries had (Aradhana Aggarwal 2012)[2]. The SEZ policy was announced in 2000 by the Government of India (GOI) with a view to overcome the shortcomings of the EPZ scheme. The. SEZs policy was announced with a view to make SEZs as an engine of economic growth by attracting foreign as well as domestic investment, to generate additional employment, boost up country’s export and to facilitate infrastructural development. Act anyone could apply for setting up of SEZs in the country which previously was more complex as most of SEZs were owned either by central or state government
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