*Professor & Director, IEMS B-School Hubli
**Assistant Manager, Welingkar Institute of Management Development & Research, Bangalore
Online published on 7 August, 2012.
India is one of the fortune countries having the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965. With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances; absence of world-class infrastructure, and an unstable fiscal regime and with a view to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April 2000. The provisions of the Special Economic Zones (SEZ) Act, 2005 allow the competent authority to extend incentives and subsidies to SEZ developers which may be detrimental to the public interest. There seems to be no systematic approach adopted by the Central Government with respect to allowing private parties into the game, procuring land for them, amending relevant labor laws which may result in a huge burden on the public finance. The Central Government has made an attempt to blindly follow China's SEZ policy to the extent that it has failed to learn from their failures. Instead it could come out with a rational and more scientific approach towards socio-economic development of our country, keeping in view the principle of equity. The government should ensure the balanced regional development instead of resorting to land grabbing using draconian land laws. The Government should also have greater focus on the underserved sections of the society as opposed to promoting a few corporate houses. The paper mainly focuses on analyzing various issues involved in SEZs and an observation on how an SEZ benefits a common man is made. It also highlights various issues involved in the current policy framework relating to Special Economic Zones (SEZs) and its implementation, more specific to land acquisition aspects and the implications.
