The SEZ allure- Why the Indian government does what it has always done
A successive chain of governments in India have repeatedly obsessed over a way to clear the red tape that entangles businesses in India, in a way to attempt a ‘quick-fix’ solution that may someday enable the country to awake to a new era of economic prosperity. The current government is no different.
Commerce minister Nirmala Sitharaman’s visit to China, and the prospect of Chinese companies investing in industrial parks has created much interest in the current regime. This idea had earlier been floated by Dr. Manmohan Singh, in a bid to revive flagging performances by SEZs.
Tax imposts, stringent laws for organised labour, the economic meltdown, and lack of skilled labour have all been floated as reasons for the non-performance of SEZs in the past.
Despite the government making sensible adjustments to recently passed land acquisition laws in a bid to make them more business-friendly, the position regarding SEZs is unlikely to change. This has mainly to do with land, and what Indians like to package as a ‘demographic dividend’. It is a struggle for private companies to acquire even small tracts of land.
The allure of this proposal still finds favour because of the mirage of a non-India; a haven of seamless business transactions, something the Chinese have so efficiently achieved.
What is needed, however, is institutional and cultural reform at the entry level of governance to make all of India an SEZ.
Source: Business Standard
commerce Minister Nirmala Sitharaman, Indian government, Industrial Development Project of the Indian Government., SEZ allure
