SEZ (Special Economic Zone): An overview, Challenges and Future

Special Economic Zones (SEZs) is one of the export promotion schemes of the government of India among Export Processing Zones (EPZs), Hundred Percent Export Oriented Industrial Units (E0Us), Technology Parks (TPs), etc. The Special Economic Zone is a geographical region which has more liberal economic laws than a country's typical economic laws. SEZ is an instrument of capacity development with the goal to promote rapid economic growth by using fiscal and business incentives to magnetize foreign investment and technology. In Asia, India was one of the first countries to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports. Hence, the first EPZ in Asia was set up in Kandla in 1965. The Special Economic Zones (SEZs) Policy was announced in April 2000, 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, with a view to attract larger foreign investments in India. Apart from Central government, any private/ public/ joint sector or State Government can set up an SEZ. Before recommending any proposal to department of commerce, the State must satisfy themselves that they are in a position to supply basic inputs like water, electricity etc. SEZs have potential to play a key role in economic development of a country, as they did for China. In this paper an attempt is made to study the of SEZs. The paper is based on the secondary data. The impact of SEZs on different sectors is examined in the paper.