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Journalism of Courage
MUMBAI, MAY 12: The Government is seeking an initiative from the private sector to develop special economic zones (SEZs). The Government does not view it as a development of a backward area, according to the director general of foreign trade, SL Lakhanpal.
Lakhanpal was addressing an open house on the Exim policy in Mumbai on Friday. "The exim policy seeks to advise the long-term perspective with the involvement of the state government by offering incentives and grants to take care of infrastructure and rebate in the state levies for the exporters," Lakhanpal said.
Almost all the state governments are eager to set up SEZs in their respective states, he added. The setting up of SEZs are subject to clearances from the environment ministry as also from costal regulatory zones.
SEZs are areas where units located would be able to import duty-free capital goods and raw materials inclusive of the domestic tariff area (DTA) without paying terminal excise duty. The only condition for units in SEZs would be to export the entire production and that DTA sales would be permitted only on payment of full applicable duties without any concession.
The Exim policy this year had allotted Rs 250 crore to be earmarked for developing the much required infrastructure. The fund will be enhanced to Rs 500 crore during the next fiscal.
The funds will be allocated for developing infrastructure on equal parameters of export performance and growth to the state governments, Lakhanpal added.
The idea of SEZs were mooted following the failure of the export promotion zones which contributes around four per cent to the total export trade from India. On the other hand SEZs, a concept more popular in China, accounts for 40 per cent of Chinese exports.
The key to the setting up of SEZs in India was to the large foreign investment and a comfortable labour situation. Though the former can be taken care off, the later may pose problems.
