The Hindu Business Line : `SEZs are stepping stones to development'

The Commerce Secretary, Mr S. N. Menon, flanked by the Ashok Leyland MD, Mr R. Seshasayee, and the CII past-president, Mr Rajeev Kaul, at the India Economic Summit 2005 in the Capital on Monday. — Kamal Narang

New Delhi , Nov. 28

THE Commerce Secretary, Mr S.N. Menon, has said that domestic special economic zones (SEZs) would be the stepping stone into a new era of collective growth and development.

He was speaking at a session on `Special Economic Zones: India's Best Kept Secret' at the India Economic Summit 2005 jointly organised by the Confederation of Indian Industry and the World Economic Forum.

Mr Menon said that it is India's strategy to create a stable and transparent statutory framework for SEZs so that there is generation of additional economic activity, and promotion of goods and services, especially for the export sector.

Referring to the SEZ laws, he mentioned that income tax exemptions help in optimising operations in the SEZs. Eight functioning Export Promotion Zones have been converted to SEZs, while 67 new SEZs have been already approved. Of these, six are operating and another six are ready for operation.

Mr Arun Jaitley, General Secretary, Bharatiya Janata Party, stressed that India should become an arbitration hub of global standards with trained arbitrators in order that companies need not go overseas for arbitration. He was speaking at a session on `Judicial Reforms: Keeping up With an Accelerating Economy.'

Alternative Law Boards and Arbitration Boards in India are leading to delays as they are headed by non-experts. These should become professional and credible. He said that the indigenous system of Lok Adalats, or local courts, was effective and also helps in reducing delays in delivery of justice.

Mr Jaitley said that legislation has been influenced by changes in technology and economic changes. Many outdated laws have already been repealed in the last decade and the process is continuing. Regarding technology, the sector itself requires legislation only for regulation, but the changes in technology have brought about changes in the manner of apprehending criminals, insurgents, and other issues, and these needed to be incorporated in new legislations, he added.

Suggesting a solution for this, he said the number of judges should be increased by about 20 per cent. In the lower courts, the ratio of pending cases to judges is as high as 5,000:1. Even in the Supreme Court, the ratio is high at 1,000:1.

Mr Baba N. Kalyani, Chairman and Managing Director, Bharat Forge, India, while speaking at the summit said that manufacturing has been an age-old migratory industry. In the 21st century, the manufacturing industry has migrated towards China and India. Manufacturing industries in India had a growth of 9.9 per cent last year and export registered 20 per cent in the same year.

Indirect taxes, infrastructure, supply chain bottlenecks, power supply, cost of capital, absence of IT, and lack of engineering talents were considered at the summit as some of the major impediments for growth of manufacturing in the country. However, some positive aspects also emerged from the discussions such as confidence of people and their ability of continuous development.

Mr Adil Zainulbhai, Managing Director, McKinsey & Company, India, pointed out the barriers in the domestic consumer good industries and stated that due to high indirect taxes by some States, manufacturing industries are moving to States such as Himachal Pradesh and towards the North.

"One of our competitive advantages is the ability to spend money on technology to satisfy the customers," said Mr Hari S. Bhartia, Co-Chairman and Managing Director, Jubilant Organosys, India. He said that sustainability in chemical industries is important.

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