SEZ Merits and Demerits

SEZ Merits and Demerits

Tags:      Gig Economy     Economy     WTO     WTO Public Stockholding     MSP     Economic Growth     Masala Bond     Environmental Performance Index     Forecast of Economic Growth     Functions of the Finance Commission

SEZs aid in export growth. By promoting SEZs, it would be feasible to offer world-class infrastructure. As a result of SEZs, employment in India has increased significantly, particularly in rural areas. SEZs can decrease procedural difficulties, administrative burdens, and restrictions imposed by monetary, trading, fiscal, taxes, tariff, and labour policies.

• SEZs provide multiple benefits such as: 1) tax breaks, 2) low-cost standard factories, 3) world-class infrastructure, 4) single-window clearance, 5) streamlined processes, 6) exemptions from different limitations, and so on. These advantages foster a corporate climate that attracts both domestic and foreign investment.

• SEZs are likely to boost exports, employment, and investment significantly.

• SEZs contribute to extraordinarily rapid economic growth.

• SEZs supply a huge number of manufacturing and other related employment.

• SEZs draw global industrial and technological expertise.

• SEZs attract both domestic and overseas commercial and public sector investment.

• SEZs can boost Indian enterprises' competitiveness and efficiency.

• SEZs aid in slowing rural-urban migration.

Arguments Against Special Economic Zones

• The SEZ Act would result in significant land acquisitions by developers, farmer relocation, little compensation, and no alternate livelihood for them.

• SEZs will be constructed on valuable agricultural land. This is expected to have major consequences for India's food security.

• Granting tax breaks, incentives, and exemptions to SEZ units will result in a significant revenue loss for the government.

• Companies are simply going to SEZs to take benefit from the tax breaks on offer, generating little net activity.

• Offering advantages and incentives to SEZ units will reduce operating efficiency.

• SEZs have been established in states with a long history in production and export. This will exacerbate regional differences.

• SEZs might offer jobs for technically qualified workers, but they cannot provide opportunities for unskilled labourers in rural areas.