Industry & Economy
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Infrastructure
SEZ policy must address stakeholders' fears
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New Delhi
Feb 27
In the backdrop of the debates over the costs and benefits of special economic zones (SEZs), the Economic Survey has said that fears about revenue losses and compensation could be allayed only through proper policies.
"The recent debate about SEZ illustrates the kind of considerations that have to be taken into account in the formulation of policies," said the Survey tabled in Parliament.
"The challenge ahead lies in appropriately sequencing to sustain the popular support for reforms and reconciling the conflicting interests of the various forms of constituencies," the Survey added.
Listing out apprehensions, it said acquisition of prime agriculture land could have serious implications for food security and there could be misuse of land by developers for real estate.
It added that there were apprehensions about revenue loss and limited generation of new activity as there may be relocation of industries to SEZs to take advantage of tax concessions.
Besides, there were fears of large-scale land acquisition by developers, leading to the displacement of farmers with meagre compensation, the Survey said. Concerns were also expressed over SEZs leading to uneven growth, thereby aggravating regional inequalities.
"Many of these apprehensions, however, could be addressed through appropriate policies and safeguards," the Survey said.
The Survey points out that EPZs or export promotion zones were "much less of an unequivocal success" and since 1965, when the first EPZ was set up, only 11 zones came into existence. The SEZs were an effort to further liberalise the EPZ concept.
SEZs in India are intended to promote value-addition to exports, generate employment and mobilise foreign exchange.
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