News:Minister of Commerce and Industry has informed Lok Sabha about the Special Economic Zones Act,2005.
What are Special Economic Zones(SEZs):
- Special Economic Zone (SEZ) is a specifically delineated duty-free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs.
- In order words,SEZ is a geographical region that has economic laws different from a country’s typical economic laws.Usually the goal is to increase foreign investments.
- The Special Economic Zones Act,2005 provides the legal framework for establishment of SEZs and also for units operating in such zones.
About Special Economic Zones Act,2005:
- The Special Economic Zones Act,2005 was passed by the Parliament in 2005.The SEZs Rules came into effect in 2006.
- The act provides for drastic simplification of procedures and for single window clearance on matters relating to central as well as state governments.
Objectives of the Act:
- generation of additional economic activity
- promotion of exports of goods and services
- promotion of investment from domestic and foreign sources
- creation of employment opportunities
- development of infrastructure facilities
Salient Features of the Act:
- Simplified procedures for development, operation, and maintenance of the Special Economic Zones and for setting up units and conducting business in SEZs;
- Single window clearance for setting up of an SEZ;
- Single window clearance for setting up a unit in a Special Economic Zone;
- Single Window clearance on matters relating to Central as well as State Governments;
- Simplified compliance procedures and documentation with an emphasis on self certification.
About National Investment & Manufacturing Zones(NIMZs):
- Government had announced a National Manufacturing Policy 2011 with the objective of enhancing the share of manufacturing in GDP to 25% within a decade and creating 100 million jobs.
- The National Investment & Manufacturing Zones(NIMZs) are an important component of this manufacturing policy.
- NIMZs are envisaged as large areas of developed land with the requisite eco-system for promoting world class manufacturing activity.
- So far,three NIMZs namely Prakasam (Andhra Pradesh), Sangareddy (Telangana) and Kalinganagar (Odisha) have been accorded final approval and 13 NIMZs have been accorded in-principle approval.
Difference Between NIMZs and Special Economic Zones(SEZs):
- The main objective of Special Economic Zones is promotion of exports, while NIMZs are based on the principle of industrial growth in partnership with States and focuses on manufacturing growth and employment generation.
- NIMZs are also different from SEZs in terms of size,level of infrastructure planning, governance structures related to regulatory procedures and exit policies.