Special economic zones - An Indian perspective

Most developing countries like India across the world have recognized the importance of facilitating international trade for the sustained growth of the economy and increased contribution to the GDP of the nation. To instill confidence in domestic as well as foreign investors and signal the Government's commitment to a stable SEZ policy, The Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 which received Presidential assent on the 23rd of June, 2005 and came into effect on 10th February, 2006.In India formal approval has been granted to 579 SEZ proposals. There are 147 valid in-principle approvals. Out of the 579 formal approvals, 335 SEZs (out of 579) + (7 Central Govt. + 12 State/Pvt. SEZs) have been notified as on 8th September 2009. In Indian economy 98 SEZ's are functional in different states as on 4th August 2009. Up to 30th June, 2009, Total 2,301 units have been approved in various SEZs comprising 1201 units in Govt. SEZs; 600 units under State/Pvt. SEZs; and 500 units under the SEZ Act 2006, With total investment of Rs.1,14,640.53 cr and providing employment to 3,87,439 persons. In the year of 2008–09 the volume of total exports from SEZs were of Rs.99,689 with 92% incremental growth from the previous year i.e. 2007–08. These achievements speak itself about the efficacy of SEZ in India. Keeping the government's goal of attracting $150 billion of FDI in mind, the Investment Commission chaired by Ratan Tata has asked the government to provide labour flexibility, remove or reduce restrictions on sectoral caps as well as promote SEZs for key sectors in order to boost investments in the country.