Special Economic Zone: Boon or Bane?
Special Economic Zone: Boon or Bane?
Special economic zone most popularly known as SEZ are a type of geographical area in any state that is just meant for the industry and trade purpose. The trade or any functions are carried out as per the pre-defined economic laws. These zones are entitled to get more liberal economic laws as compared to the typical economic laws. Many people consider it is a boon for the trade purpose while there are other people who think it as of no use as most of the benefits are taken by high profile people. So what do you think? Special Economic Zone is a boon or bane for you?
Yes
• It is a boon for the country as it enhances the free trade with more flexibility in the economic laws that are really important in carrying out the trade relations.
• The best part is they are self-contained and integrated with no outside interference in their operations.
• They are the means through which the country gets the state-of-the-art infrastructure and the availability of the most skilled and trained workforce.
• Enterprises and developers are more motivated to get associated with it as it provides 100% income tax exemption. This exemption is valid for five years.
• The main benefit comes to the manufacturing sector as they are open for 100% FDI investment.
• The duty free enclaves are not required to have any industrial or import licensing requirements.
Bane
• There is no need to provide so much of tax exemptions for such a long period as it ultimately leads to loss of revenues.
• The undue advantage is taken by the traders who buy the land at the cheap rates and keep it for personal use.
• The project has many loopholes like it units cannot match up with the applications and others, making it a profit machine for the other people.
• Special economic zones are the biggest curse for the farmers if their land is used for the purpose.
• The exemption of tax and then a lot of tax holidays, all the factors are not going to help the finance ministry in any way. It is ultimately the common men who have to pay for it.
Conclusion
Special Economic Zones are undoubtedly a good way to promote the trade. It encourages the manufacturing activities that will ultimately benefit the economy of the country. However, the main problem comes from exemption of taxes that will create an equal burden on the finance ministry as well as the common men. Moreover, the sale of land should be made more transparent so that traders cannot take the undue advantage of buying the lands at cheaper rates.
Discussion
- RE: Special Economic Zone: Boon or Bane? -Deepa Kaushik (06/20/14)
- The discussion is valid to think whether SEZ is a boon, but it cannot be termed bane. Every country is in a compulsion to evolve as per the modernization and globalization to match up their pace with the economic race internationally. We do need to start our pitch from some point, and this could be a good move to have SEZ for developing our trade relations.
With a good note to start up with SEZ, the topic remains under discussion due to the loopholes in the construction of its rules. It is the tax exemption and the long blocking period for the same, which is of prime concern here. Exempting the tax from the business class is definitely going to create a pit in the revenue bank. Government is obviously running up the systems from the tax revenues, which in turn is going to get distributed as an extra burden on the common man. This clause is definitely calls up for an amendment.
Also the usage of land comes into the matter of discussion, as we all visualize that the land advocated for a specific purpose is often not utilised so, in India. Allowing any loopholes in the rules is definitely not welcomed. Precisely, we do need SEZ, but with some justified laws and regulations for the same.
- RE: Special Economic Zone: Boon or Bane? -Karan (06/20/14)
- A replication of the silicon valley, although burdened with million expectations have now been seen emerging.It is definitely a boon for the working class as well as the residents which fall under that. Any's city's SEZ is its cherry on the top , so it has to do something with the rising modernity and globalization.
Although some would argue that it is divisive in nature, but i would rather propose that in an attempt to foster the upliftment of any society, u need to start from somewhere, and that might seem divisive in the first place but later will only be seen as a boon, likewise i india as it has been given chance in many cities starting from Bangalore, to chandigarh, to hyderabad, and still growing hopefully.
So a definity apparent boon!!
