Govt-appointed panel to suggest employment-based sops for SEZ
New Delhi: A group set up by the commerce ministry to study SEZ policy will make suggestions for shifting from fiscal support to employment-based incentives and introducing grandfathering clause for existing provisions, according to an official release.
The matter was discussed in the group's fist meeting, headed by Bharat Forge chairman Baba Kalyani, held last week here.
Kalyani stressed that the biggest challenge today is creation of jobs and said the focus of the group would be addressing this issue.
"The group will make suggestion to shift from fiscal incentives to employment-based incentives, reframe the boundaries and introduce grandfathering clause for existing provisions," the commerce ministry said quoting Kalyani.
Commerce and Industry Minister Suresh Prabhu has requested the members of the group to review the entire ecosystem of special economic zones (SEZs) to suggest policy changes to make it simple and transparent.
The group has decided to meet in the middle of July again and will submit its report by the end of August, it added.
SEZs are export hubs and contribute significantly to the country's total outbound shipments.
The move assumes significance as the US has approached the WTO's dispute settlement mechanism against India's export support schemes including SEZ.
SEZs have emerged as major export hubs in the country as the government provides several incentives including tax benefits and single window clearance system.
The developers and units of these zones enjoy certain fiscal and non-fiscal incentives such as no licence requirement for import, full freedom for subcontracting and no routine examination by customs authorities of export/import cargo. They also enjoy direct and indirect tax benefits.
Exports from special economic zones grew by about 15 per cent to Rs 5.52 lakh crore in 2017-18.