‘SEZs create plenty of jobs; fears of misuse ill-founded’

In a sign that the UPA government is keen to keep its internal contradictions out of public glare, thanks to the approaching...

In a sign that the UPA government is keen to keep its internal contradictions out of public glare, thanks to the approaching election year, the Economic Survey scripted by the Finance Ministry has not only refrained from criticising Special Economic Zones and their tax incentives, but also spoken about the new investments and employment generated by the zones in an appreciative tone. The commerce and finance ministries have, time and again, differed on the sops for SEZs.

Though it acknowledges that the SEZ policy ‘created a lot of heat’, the survey stresses that the apprehensions about the ‘misuse of the scheme’ and ‘relocation of existing industries into SEZs’ are ‘ill founded.’ “Experience has shown that fresh investments and employment have been flowing into the SEZs. The newly notified SEZs have provided direct employment to 61,015 persons.”

Even in the services sector, IT/ITES SEZs are estimated to create 12.5 lakh jobs, the survey notes after listing some of the SEZ success stories like Nokia in Sriperumbudur (6,637 jobs mostly for women),and Apache shoes SEZ and Brandix Apparels SEZ in Andhra Pradesh (both expected to employ 80,000 workers)

Story continues below this ad

Further, the survey admits that there is a trickle-down effect of these zones beyond the direct employment and the Rs 67,347 crore investment made in notified SEZs. “The benefits derived from multiplier effect of the investments and additional economic activity in the SEZs along with the employment generated is estimated to far outweigh the revenue losses on account of tax exemptions given to the SEZs,” it notes.

On the export front, it has also highlighted that exports from SEZs are expected to nearly double from Rs 34,615 crore last year to Rs 67,088 crore in 2007-08. But the survey has also shown concern on the fall in exports growth to the US (especially textiles exports to US and the EU dipping) and the dip in services exports.

Apart from relief measures already announced, the Survey argues that these concerns need some ‘fundamental policy changes’ that include ‘checking the proliferation of SEZs,’ ‘weeding out unnecessary customs duty exemptions’ and ‘abolishing export schemes that are redundant with fall in import duties.’

Significantly, the Survey also calls for evolving a clear policy for ‘beneficial’ comprehensive economic co-operation agreements (CECA) ‘even with some developed countries’ instead of just preferential or free trade agreements.

'Remain in US, avoid travel': Microsoft, JP Morgan, Amazon advise visa holders to return before Trump’s $100,000 H-1B fee deadline

‘Stay in US, avoid travel’: Firms advise H-1B visa holders to return before fee deadline

World1 hr ago

Microsoft and JP Morgan have warned their employees on H-1B and H-4 visas to return to the US before September 21 due to President Trump's new visa fee rules. Amazon has also advised against international travel. The policy includes a $100,000 annual surcharge on H-1B visas and has caused market fluctuations. It will be in effect for at least 12 months.

View all shorts

Live Blog