Context:
The government is taking various measures to revitalize special economic zones (SEZs) and ease business transactions between SEZs and the domestic tariff area (DTA) or the domestic market.
Special Economic Zone (SEZ):
- Geographical region having more liberal economic laws than the country’s domestic economic laws.
- Typically duty free and offers fiscal concession for ease of doing business.
- Covers broad range but limited to Free Trade Zones (FTZs), Export Processing Zones (EPZs), Free Zones (FZs) and Industrial Estates (IEs)
Types of SEZ:
- Free Trade Zones (FTZs) – Secure areas designated for processing imported and exported goods, offering customs procedures and duty-free treatment.
- Export Processing Zones (EPZs) – Zones focused on commercial and industrial exports, providing tax and import duty exemptions.
- Free Zones (FZs) – Areas designed for industrial purposes, offering tax-related incentives.
- Industrial Estates (IEs) – Areas for specific activities like technology hubs, airport-based zones, and logistics parks.
Special Economic Zone (SEZ) in India
- India – one among the 1st in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports
- Asia’s 1st EPZ – Gujarat (Kandla)
- Established under the Foreign Trade Policy to overcome the limitations of EPZs.
- Structured closely with China’s successful model.
- India has 379 notified SEZs – out of which 265 are operational.
- Tamil Nadu, Telangana, Karnataka, Andhra Pradesh, and Maharashtra account for 64% of the SEZs.
- The Board of Approval is the apex body and is headed by the Secretary, Department of Commerce (Ministry of Commerce and Industry).
- Objectives – create additional economic activity, boost domestic and foreign investments, generate employment, develop infrastructure facilities etc.
- Major Incentives and Facilities Available –
- Duty free import/domestic procurement of goods for development,
- Exemption from various taxes
- External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.
- Single window clearance for Central and State level approvals.
Source: The Hindu
Previous Year Question
With reference to ‘Eco-Sensitive Zones’, which of the following statements is/are correct?
1. Eco-Sensitive Zones are the areas that are declared under the Wildlife (Protection) Act, 1972
2. The purpose of the declaration of Eco-Sensitive Zones is to prohibit all kinds of human activities in those zones except agriculture.
Select the correct answer using the code given below.
[UPSC Civil Services Exam – 2014 Prelims]
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer: (d)
Explanation:
Statement 1 is not correct:
Eco-Sensitive Zones are the areas that are declared under the Environment Protection Act, 1986.
Statement 2 is not correct:
Activities permitted in the Eco-sensitive zones – agriculture, Horticulture practices by local communities, organic farming, rainwater harvesting, scientific research, tourism, etc.
