Govt may do away with SEZ policy

The government’s much-hyped Special Economic Zones (SEZ), programme, which was launches in 2006, may end its run on a not-so happy note, reports the Business Standard newspaper.

Scams and controversies have finally forced the government to do away with SEZs. 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. It has six months to do so. The government move is in line with its desire to end the feud between the commerce and finance ministries. Finmin believes that some of the numbers provided by the commerce ministry on exports, jobs and investments by SEZs were exaggerated. The existing SEZs will continue to function or remain operational, while those approved might not be notified and developers be allowed to utilize the land for other purposes. The objective of the study is to find put is the economic goals of the SEZs were met or not. Even the commerce ministry wishes to do away with SEZs. It plans to promote the National Manufacturing and Investment Zones (NMIZ), under the National Manufacturing Policy. The Minimum Alternate Tax imposed on both developers and units in the 2011-12 and the dividend distribution tax (DDT), which was imposed on developers, took the sheen away from SEZs and the interest of companies waned. According to latest data, exports from SEZs were up almost 30% to $88 billion in 2012-13, against $68 billion in the previous year. SEZs generated 10,74,904 jobs as of March 31.