4 reasons why government may not scrap SEZ policy

Moneycontrol Bureau

Though media reports suggest that the government may scrap the Special Economic Zone (SEZ) policy, brokerage firm Centrum feels that it is highly impossible. Launched in 2006, the programmed has been mired in controversies. Commerce ministry has asked the Export Promotion Council for EoUs and SEZs (EPCES) to commission on a study to Icrier to find if the SEZs have met their economic objectives for which the programme was rolled out, the report said.
Here are four reasons why according to Centrum, the government is unlikely to scrap SEZ policy:

• Already USD 44 billion of investments have been invested in these SEZs.
• Exports from the SEZs rose 30 percent to USD 88 billion in FY2013 when the country as a whole reported 1.8 percent year-on-year fall in exports to US 300.6 billion in the same period.
• SEZs have provided 10.75 lakh jobs- therefore, Centrum believes that it is almost impossible for the government to think of scarping SEZ policy;
•  Even if SEZs are denotified, the developers are expected to be allowed to develop the land.