SEZ in India
The Special Economic Zones (SEZs) refers to geographic areas or zones in the country which are governed by special economic laws aimed at attracting larger foreign investments and promoting exports from the country. The Government of India, in April 2000 announced the introduction of Special Economic Zones policy in the country, deemed to be foreign territory for the purposes of trade operations, duties and tariffs. The Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 and came into effect from 10th February, 2006 along with the special Economic Zones, Rules, 2006. The Act provided for drastic simplification of procedures and for single window clearance on matters relating to central as well as state governments
Objectives of SEZ of India
The main objectives of the SEZ Act are:
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 SEZ Rules
The SEZ Rules provide for:
" • Simplified procedures for development, operation, and maintenance of the Special Economic • Zones and for setting up units and conducting business in SEZs
• Single window clearance for setting up of an SEZ
• Single window clearance for setting up a unit in a Special Economic Zone
• Single Window clearance on matters relating to Central as well as State Governments
• Simplified compliance procedures and documentation with an emphasis on self certification
Approval mechanism of SEZs
A proposal for establishment of SEZ must be approved by the Board of Development, constituted by the Central Government under the SEZ Act. A developer may submit the proposal for establishment of SEZ to the concerned State Government, which in turn forwards it to the Board of Approval or submit the proposal directly to the Board. The Board of Approval has 19 Members. Once an SEZ has been approved by the Board of Approval and Central Government has notified the area of the SEZ, units are allowed to be set up in the SEZ.
Administrative set up
The functioning of the SEZs is governed by a three tier administrative set up.
- The Board of Approval is the apex body and is headed by the Secretary, Department of Commerce.
- The Approval Committee at the Zone level deals with approval of units in the SEZs and other related issues.
- Each Zone is headed by a Development Commissioner, who is ex-officio chairperson of the Approval Committee