Revival of SEZs- Prime agenda of the new government
The government is determined to revive SEZs and Arun Jaitley today mentioned that some of the effective steps to be taken by the government will make the SEZs the instruments of industrial production, economic growth, export promotion and employment generation.
While presenting the Budget 2014-15, the Finance Minister stated that for achieving this, effective steps would be undertaken to operationalise the SEZs, to revive the investors’ interest to develop better infrastructure and to effectively and efficiently use the available unutilised land.
According to ministry of commerce and industry data of the total 47,803 hectares of SEZ land notified, only 17,689 has been put to use so far. After the imposition of Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) in 2011, the takers for SEZs started shying away from investing in them.
In 2011, the, UPA government had imposed 18.5 % MAT on book profits of special economic zone developers and units. Although the government last year announced an incentive package to revive these zones, the developers had lost faith as initially these SEZs were rolled out with a promise of tax benefits.
Several developers have surrendered their projects as imposition of taxes has nullified the benefits earned from the incentives for setting up SEZs and units in those zones.
SEZs contribute about one-third to the country’s total exports. They provide employment to about 15 lakh people and due to lack of interest in them, job creations had reduced in the last 2 years.
Source- Financial Chronicle
Dividend Distribution Tax (DDT), finance budget 2014-15, Minimum Alternate Tax (MAT), SEZ, Special Economic Zones (SEZ), UPA government
