Three years after the government brought in a SEZ law promising greater economic activity on the back of tax sops, the Economic Survey on Thursday expressed concern over 'proliferation' of Special Economic Zones seeking a check on them.
"Besides the short-term relief measures. . . some fundamental policy changes are needed for the merchandise trade sector and these include checking the proliferation of SEZs," the Survey, a government pre-Budget policy paper said.
Exports from the zones in 2008-09 stood at Rs 99,688 crore (around $20 billion) against the total exports of $168 billion.
"Projected exports for 2009-10 from SEZs are Rs 110,000 crore (around $22 billion)," the survey, tabled in Parliament said.
Ever since the SEZ Act came into force in February, 2006 a furious debate has been witnessed on the issue not only among political parties and policy commentators but also among different wings of the government.
On concerns of revenue losses, the finance ministry has all along been opposed to the mushrooming of the SEZs.
Till May 13, 2009, as many as 568 SEZs have been approved and 318 zones notified.
With the economic downturn, the SEZs seem to have lost attraction. Several of the leading realty players, including DLF and the Rahejas, have sought denotification of their zones citing the slowdown.
Besides, protests against land acquisition for SEZs have also became common across the country. While the government has imposed a ceiling of 5,000 hectares for an SEZ, the developers have found different ways of circumventing the threshold.
