10 July,2014 02:22 PM IST | | Agencies
Expressing commitment to revive special economic zones (SEZs), the government today said it would take effective steps to make them instruments of industrial production, economic growth, export promotion and employment generation
New Delhi: While presenting the Budget 2014-2015, Finance Minister Arun Jaitley said the government is committed to revive SEZs and make them effective instruments of industrial production, economic growth, export promotion and employment generation.
"For achieving this, effective steps would be undertaken to operationalize the SEZs, to revive the investors' interest to develop better infrastructure and to effectively and efficiently use the available unutilised land," he said.
Of the total 47,803 hectares of SEZ land notified, only 17,689 has been put to use so far, according to ministry of commerce and industry data.
Once major export and manufacturing hubs, SEZs started losing sheen after the imposition of Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) in 2011 on them. Industry had asked the government to roll-back the MAT on SEZs. They had said that the levy has suppressed the potential of these zones as a tool to promote exports and generate employment.
In 2011, government had imposed 18.5 per cent MAT on book profits of special economic zone developers and units. Although government last year announced an incentive package to revive these zones, several developers have surrendered their projects as imposition of taxes has eliminated 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 lakhs people. The Commerce Ministry is struggling to increase exports as the country's shipments in the last three years have been hovering around USD 300 billion.
Of 566 formally approved SEZs, only 185 are in operation. Exports from these zones increased from Rs 22,840 crore in 2005-06 to Rs 4.94 lakh crore in 2013-14.
