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Impact of Special Economic Zone (SEZ) in India

Special Economic Zone is the most discussed and disputed topic in India. For
the economic development and to encourage export of various things and to
take place in globalization all the countries are contributing themselves and
trying for it consciously and SEZ is one of the parts of this. Special Economic
Zone means to give special facilities to the entrepreneur. In SEZ special
facilities are provided to the industrialist, who starts their business in this
sector. Special facilities for taxes, visa will require in this zone.
A special economic zone (SEZ) refers to designated areas in countries with
special economic regulations that differ from other areas in the same
country. These regulations tend to contain measures that are conducive
to foreign direct investment. Conducting business in a SEZ usually means a
company receives tax incentives and the opportunity to pay lower tariffs.
The objectives of the study are to overview the effect of Special Economy
Zone and suggest options to solve the problems. The whole paper is based
on descriptive research, comparative study and analytical logic developed
through the understandings from various reports, books, journals and online
data bases.
The objectives related with India given as under
1. To develop infrastructure facilities in the country.
2. To increase employment through SEZ.
3. To reduce imbalance in financial development.
4. To improve international trade and get foreign currency with the help of
5. To develop the country through the development of industrial and
economical growth.
6. To attract the foreign investment.
7. To give the facilities to the internal trade and business with the help of the
Special Economic Zones (SEZs) Scheme in India was conceived by the
Commerce and Industries Minister Murasoli Maran during a visit to Special
Economic Zones in China in 1999. The scheme was announced at the time of

annual review of Export-Import (EXIM) Policy effective from 1.4.2000. The

basic idea is to establish the zones as areas where export production could
take place free from all roles and regulations governing imports and exports
and to give them operational flexibility.
The progress and expansion of SEZ in China, Korea, Singapore, Malaysia and
America has considered by Government of India and accepted the concept of
SEZ in March, 2000. Then protection of exporters and demand of traders has
been considered by Indian government. Parliament bill of SEZ has sanctioned
on 23rd June, 2005 by the central government. SEZ Act has been applicable
to all over India. SEZs are recognized under financial development and
export promotion. As per SEZ Act, SEZ means specially created territory of
free taxes and fees .In these sector industries are established for producing
articles and supplying services.
As per Special Economy Zone Act, 2005 and 2006, the definition of SEZ was
included articles production, supplying services, free trade and free ware
Three types of SEZ is as under
a) SEZ for multi-products
b) SEZ for special sector
c) SEZ for port or airport
To declare by government, which type of SEZ has permitted out of above
types of three?
Some of the economist and politician are explain SEZ as a way of economical
development, but some of them oppose the SEZ. The well known economist
Mr. Raghunath Rajan said that the tax free facilities given to the SEZ, so give
up revenue of the country. The social worker Mrs. Medha Patkar says that the
SEZ is only for self interest section. Mr. Vishwanath Pratap singh said that the
government is helping the companies to take over the land from the farmers.
The supporters of SEZ say that the SEZ has promoted and accelerated the
development of economy, to increases infrastructure facilities, employment
and export. For entrepreneurs included in SEZ have provided international
grade services and amenities, in fractural facilities as well as financial
promotion schemes, so they have obtained new life. This industrial sector is
developed with trade centre, educational institutions, residences facilities as
well as hospital, play grounds and entertainment centers are included. In
new Mumbai SEZs are going to develop for increasing investment included
electricity generation centers, transports facilities etc. so these SEZs are
attraction to domestic and foreign investors

Due to SEZ industrial sector, export, employment, infrastructural facilities
are increasing.
But following problems will created by SEZ
1. Farmers will be landless
2. Increase unemployment
3. The existence of small scale industries is in risk
4. To neglect agricultural sector
5. To lost revenue of government for tax free facilities
6. Capitalism will take birth
7. No rules about the construction
8. To increase financial disequilibrium.

9. Imbalance in environment
10. No protection of the workers
11. The industries in the SEZ was held maximum land are not given
clear in the Special
Economy Zone Act
Land, especially agricultural land is a very sensitive issue in India. There are
millions of people whose livelihood depends on agricultural land. But the
introduction of SEZ in India has resulted in the dispossession of agricultural
land and has affected the livelihood of farmer at large. In against of this,
farmers first protested to safeguard their interests through litigation and
court cases challenging the establishment of SEZs. But later on, the
resistance against SEZ in India became massive when political parties also
joined the farmers.
Jamnagar Incidence
Nandigram Violence
SEZ is more important for raised export, employment and financial
development of the country. For equal development of the state, all-round
development of the country, the SEZ is essential. To solve the problems of
the SEZ, some changes are necessary. For solve the problems of SEZ,
following options should be considered.
1. To acquire non agricultural land for the SEZ
2. Employment for the local workers
3. Limitation on maximum land holding
4. To save the Small Scale Industries
5. To protect workers rights
6. To minimize land acquisition for the SEZ
7. To Save Environment
8. To fix price of the land
9. Do not injustice on the farmers
10. Acquisition of the land on lease
11. Shares to be given to landholders

CONCLUSION:All over the opposition to SEZ, but for financial development, export growth,
increase employment of the country, SEZ is essential. Government has
passed special SEZ Act and implementation is doing. It is necessary to see
the SEZ in positive view. SEZ projects should be started in backward area for
development of regional equilibrium. SEZ have been acquired land from the
farmers, government should be done rehabilitation and included them as
shareholders of the SEZ projects as well as the family members of the
farmers should be reserved some vacancies of employment. Employment
should be to the local workers, for existence of SSI to prepare list of articles
of SSI, to limitations of maximum land acquired for SEZ etc. options should
be considered by Government then farmers are helping to SEZ and economic
development is done through SEZ.