Prospects of Special Economic Zones in West Bengal

Prospects of Special Economic Zones in West Bengal

Special Economic Zone (SEZ)

An SEZ, or a Special Economic Zone, is like a foreign territory within a country, a geographical region with different economic laws than a country’s typical economic laws, with the main goal of attracting foreign investment. In economic terms, SEZ is specifically delineated duty-free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties & tariffs An SEZ is governed by a special set of rules to facilitate foreign direct investment for export-oriented production. SEZs are free trade zones and customs authorities do not supervise them. These zones are typically marked by minimum bureaucracy, best infrastructure, generous tax holidays, unlimited duty free imports of raw, intermediate and final goods as well as capital goods. Basically, governments look to SEZs to overcome difficulties in bureaucracy and fiscal measures.

Features of Special Economic Zones:

The main features of SEZ are following:

i. SEZ units would be able to import capital goods and raw material duty free.

ii. SEZ units shall be deemed to be foreign territory for the purpose of trade operations and tariffs. Goods moving to the SEZ areas would be treated as deemed exports.

iii. SEZ units would be able to procure products from the Domestic Tariff Area (DTA) without paying the terminal duty.

iv. SEZ units would be required to export their entire output. Any sale by these units to the DTA would be treated as imports into India subject to all duties/taxes on similar imported products.

Objectives:

Setting up of SEZ is, in fact, a part of the Government of India’s policy of promoting exports by reducing transaction costs to trade through simplification of export-import Procedures. The aim is to enhance foreign investment, provide an internationally competitive & hassle-free environment for exports, boost industrial investment & exports and to generate employment while persuading the private sector to build social infrastructure that the states cannot afford. West Bengal decided to set up special economic zones to provide an internationally competitive environment for exports.

( Analyzing what SEZ through industrialization will generate:

Special Economic Zones are in the news for one reason or the other almost every day. SEZs in West Bengal as export-oriented business zones where companies may avail of tax benefits and a cluster of incentives and concessions from the government have made quite an impact with their result.

The Board of Approval, comprising officials from various ministries, cleared many proposals.