Set up committee on SEZs to increase role of states: CUTS
December, 01st 2011
Economic think-tank CUTS today asked the government to set up a National Coordination Committee on special economic zones (SEZ) to increase the role of states in setting up these tax-free enclaves.
"A major concern is that states usually consider Special Economic Zone (SEZ) a central government issue having no or insignificant role for them. Studies indicate high correlation among state-level socio-economic development, industrialisation and number of SEZ units in a state," CUTS International Secretary General Pradeep Mehta said in a statement.
While economically better-off states like Karnataka, Tamil Nadu, Andhra Pradesh, Maharashtra , Gujarat and Kerala are home to about four-fifths of all notified SEZs, poor states like West Bengal, Chhattisgarh and Jharkhand have very few of these special conclaves to boast of. The northeast region, which comprises seven states, has just one SEZ.
"...to convince states and take them into confidence on issue relating to SEZs...a National Coordination Committee on SEZs should be formed with direct involvement of all states and union territories and such as body should come under the supervision of the Prime Minister's Office," he said.
He also said that a centralised mechanism including a dedicated portal should be created at the central level with sections on each of the states to ensure smooth functioning of SEZs.
Exports from SEZs grew 26.2 per cent year-on-year to Rs 1.76 lakh crore during April-September this fiscal.
In the wake uncertainties over tax incentives, scores of SEZ developers were given more time to execute their project, while some of them have surrendered projects. The draft Direct Taxes Code, which is to replace the Income Tax Act, has proposed withdrawal of exemptions for new units.
In this backdrop, the Commerce Ministry has floated a discussion paper to revamp the policy.