Infra, realty trusts can set up biz in SEZs. Will this increase exports?

The Centre amended the Special Economic Zones Act (SEZs Act) in August 2019 to broaden the definition of "person" who can set up their units in these zones.

The new expanded definition of a “person” who can set up a unit in a special economic zone (SEZ) can help increase the number of exporting units in India and help utilise the full potential of the land in these zones, experts say, though it may not further the SEZs’ basic purpose of increasing the country’s net exports.

The Centre amended the Special Economic Zones Act (SEZs Act) in August 2019 to broaden the definition of “person” who can set up their units in these zones. After the amendment, "trust” or “any entity as may be notified by the Central Government" can set up their operation in SEZs.

The bill does not review taxes imposed on units inside SEZs, nor does it address fine-tuning of the policy according to state- and sector-specific requirements, rising dependency on imports, or lack of connectivity and infrastructure, experts pointed out.

SEZs are clusters developed to foster industries which can help boost exports. The government has, so far, notified 351 SEZs of which 232 across India were operationalised. However, about 150 SEZs across India remain non-operational, with half of the land notified for SEZs lying vacant.

The establishment of these SEZs has also fueled land conflicts ever since their inception. About 11 such conflicts have been recorded so far by Land Conflict Watch (LCW), an independent network of researchers and journalists across India mapping land conflicts.

This is the fourth story in our series examining the 35 bills that the 17th Lok Sabha (lower house of parliament) passed during its last session, when it worked for 281 hours over 37 days to pass a bill every eight hours on average, referring none to a committee for detailed scrutiny. The SEZ bill was passed on August 5, 2019, when the lower house of parliament abrogated Jammu and Kashmir’s special constitutional provision. Critics say many approved bills had infirmities that further debate and committee appraisal could have ironed out.

Business Standard