SPECIAL ECONOMIC ZONE A Special Economic Zone (SEZ) is a geographical region that has economic and other laws

that are more free-market-oriented than a country's typical or national laws. "Nationwide" laws may be suspended inside a special economic zone. Usually the goal of a structure is to increase foreign direct investment by foreign investors, typically an international business or a multinational corporation (MNC). The SEZ Act, 2005, supported by SEZ Rules, came into effect on 10th February, 2006, providing for drastic simplification of procedures and for single window clearance on matters relating to central as well as state governments. Approval mechanism The developer submits the proposal for establishment of SEZ to the concerned State Government. The State Government has to forward the proposal with its recommendation within 45 days from the date of receipt of such proposal to the Board of Approval. The applicant also has the option to submit the proposal directly to the Board of Approval. The Board of Approval has been constituted by the Central Government in exercise of the powers conferred under the SEZ Act. All the decisions are taken in the Board of approval by consensus. The objectives of SEZ ACT can be clearly explained as the following: (a) Generation of additional economic activity (b) Promotion of exports of goods and services; (c) Promotion of investment from domestic and foreign sources; (d) Creation of employment opportunities; (e) Development of infrastructure facilities.

The major incentives and facilities available to SEZ developers include:

Exemption from customs/excise duties for development of SEZs for authorized operations approved.

Income Tax exemption on income derived from the business of development of the SEZ in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act. Exemption from minimum alternate tax under Section 115 JB of the Income Tax Act. Exemption from dividend distribution tax under Section 115O of the Income Tax Act. Exemption from Central Sales Tax (CST). Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act).

List of Special Economic Zones in India Currently there are 143 SEZs (as of February 2012) operating throughout India in the following states; Tamil Nadu - 20: Karnataka - 18; Kerala - 6; Chandigarh 1; Gujarat - 8; Haryana - 3; Maharashtra - 14; Rajasthan- 1; Uttar Pradesh 4; West Bengal - 2: Orissa - 1. And so on. SWOT ANALYSIS FOR INDIAN SEZs Strengths: 1. Skilled manpower 2. Financial and other institutional networks like stock exchanges, insurance companies, educational institutes. 3. Worldwide acceptance of capabilities in fields like pharmaceutical manufacturing and research, manufacturing auto parts, entertainment,etc. Weakness: 1. 2. 3. 4. Infrastructure bottlenecks Political changes Convertibility of currency on capital A/c Inappropriate locations.

Opportunities: 1. An alternative manufacturing base,particularly comparedto Chinese SEZs. 2. New small ports and airports are also being developed keeping SEZ concept in mind.

Threats: 1. Loosing edge of low labour costs many countries are competing. 2. Formation of economic blocks, effect on government revenues. 3. The pattern of buying and selling may not continue. With relocations of industries in other third world countries, new competitors will emerge. To conclude The SEZs could drastically improve the economic activity in the country, make the countrys export competitive and globally noticeable, be net foreign exchange earner and provide immense employment opportunity. But this should not be done at the cost of bringing down the agricultural activities, Land grabbing and real estate mafia should be properly regulated so that the common man is not the net sufferer to get the net foreign exchange earner up and running.