India must leverage the advantages of Special economic zones in the present geopolitical and trade context. Comment (200 Words)
Refer - Financial express
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· The government’s flip-flop approach took its toll on manufacturing SEZs that could never meaningfully take off. As of September 30, 2018, the actual employment in manufacturing SEZs was 84% short of the proposed numbers. However, the IT industry proved to be resilient and continued to hold the baton.
· Indonesia, for example, is offering tax breaks for up to 24 years in its SEZs (KEKs). In contrast, the government of India (GoI) is abandoning its direct role in economic policy. In industry, for instance, despite the calls of Make in India and Atmanirbhar Bharat, there is no strategic blueprint as to how to promote industry.
· The focus has been on creating conducive business conditions in the whole country with a single-minded pursuit of improving ‘Ease of Doing Business’ (EoBD) ranking. Indeed, India has jumped several ranks from 142 in 2014 to 63 in 2020.
Some of the recommendations are as follows:
· Systematically discuss the recommendations of the Baba Kalyani Committee report and develop appropriate follow up action to implement them. Break the recommendations down into two-time frames—short-term actions that are incremental and do not require extensive debate; and medium-term strategic changes that require consensus building before they can be implemented.
· Build consensus for strategic changes in the SEZs to keep them relevant in the wake of WTO compliances. As proposed by the committee, reorient the objective of the SEZs from promoting exports to economic activity and employment generation, and focus on attracting large, foreign companies. Several developing countries are now following this strategy in their SEZs.
· Allow all those benefits to SEZ units/developers that are offered in the wider economy. Complement them with additional benefits. Thailand offers massive merit-based incentives to priority industries, yet makes sure to offer additional benefits in the SEZs.
· Ensure effective single-window clearances, stability in rules and regulations, and efficient administrative services. A lesson can be learned from the Philippines, where the SEZ authority (PEZA) offers 24×7 one-stop services to investors.
· Promote logistics zones to contribute to a significant reduction in logistics costs by offering effective solutions. All manufacturing SEZs, ports and airports should be integrated with logistics parks.
Venkateshwaran R 4 years
Kindly provide feedback. Thank you
