Ravindra Sannareddy says SEZs must be more comprehensively built than they currently are, including infrastructure and sustainability.
Uncertain tax policies have hindered the susÂtenance of Special Economic Zones (SEZs), and caused many investors to hold back investment plans. A few investors have pulled until there is more clarity on the impact of the proposed Direct Taxes Code (DTC) Bill, which seeks to reverse incentives to SEZs by 2014.
Assurance is needed that no major changes in the SEZ policy will be made in next five years on firm comÂmitments or external infrastructure. Large multiÂproduct SEZs that invest in creating new infraÂstructure must be given a stable policy window of a miniÂmum of 10 years so that they are not crippled while still learning to walk. The stability must be extended to units entering the SEZ so that they are also not affected by changes to policy.
A comprehensive list of aspects that enable the achievement of the key long term objectives of the SEZ policy should be prepared, and projects must be evaluÂated, ranked and incentivised based on them. Minimum standards for infrastructure development must be defined. Environmentally sensitive systems for waste collection, recycling, and disposal must be encouraged. SEZ projects that generate employment and bring development to underdeveloped rural regions must be better incentivised. Small SEZ projects that come up within the limits of large cites without creating addiÂtional infrastructure must be discouraged.
The government must prepare a list of high value, technology-driven manufacturing and service industries that are currently underdeveloped in India. These inÂdustries must be encouraged and given fiscal incentives so that they can develop and attain global prominence.
The author is Co-Founder and Managing Director, Sri City, a 6,000 acre multiproduct SEZ with an FTWZ adjoining a DTZ.
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