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INDUSTRIAL SECTOR — Economics STD 12 Commerce — Question

Gujarat BoardEnglish MediumSTD 12 CommerceEconomicsINDUSTRIAL SECTOR5 Marks
Question
Write a note on Special Economic Zone.
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Answer

$1.$ Introduction:
  • Special Economic Zone is known as $SEZ.$
  • In India at Kandala, Export Processing Zone $(EPZ)$ was started to promote export business.
  • It has many defects so from $1st$ April $2000$ Special Economic Zone is started.
  • The policy of $SEZ$ is based on China‘s successful policy in $14$ cities in $1980.$
$2.$ Objectives of $SEZ:$
$(1)$ To create additional economic activities
$(2)$ To promote the export of product and services
$(3)$ To encourage domestic and foreign investments
$(4)$ To create employment opportunities
$(5)$ To develop infrastructural facilities
$(6)$ To create control free international competitive environment for export
  • So that export of the country develops and production sectors becomes at par with the world.
$3.$ Characteristics of $SEZ:$
$(1)\ SEZ -$ Special Economic Zone is a fixed geographical area where business units and manufacturing units are granted.
  • Special facilities and economic laws are different here than Non$-SEZ$ area.
  • Tax relief, tax exemptions, and minimum trade control, attract foreign investors. Industries established in $SEZ$ are granted special financial packages, tax exemptions, qualitative infrastructure etc.
$(2)$ The concept of $SEZ$ in India is developed on the model of $SEZ$ of China.
  • It encourages export oriented units through Foreign Direct Investments.
$(3)$ In India, on $1st$ April $2000$ first policy of $SEZ$ was declared.
$(4)\ SEZ$ is a geographical area where economic laws are different.
$(4)$ China. India, Russia, North Korea, Philipins, Poland etc. have set up special economic zones.
$4.$ Special Facilities of $SEZ:$
  • The units set up in $SEZ$ are granted $100\%$ to tax exemption from export income.
  • It is exempted from central sales tax, service tax, custom duty, excise duty, etc.
  • All permissions to be obtained from central and states are given from single window.
  • Units set up in $SEZ$ are free from any labour laws.
  • As labour laws are not applicable to these units, all its units are announced as public utility service.
  • Units set up in $SEZ$ without any control can purchase product or service from anywhere in the world.
  • Any individual, government, joint enterprise, state government or its representative institution can set up $SEZ.$
  • Foreign institutions too can set up $SEZ$ in India.
  • All types of $SEZ$ can be controlled by government.
$5.$ Special Economic Zone in India $(SEZ):$
  • Eight Special Economic Zones $(SEZ)$ are setup in India.
  • They are as below:
$(1)$ SantaCruz $($Bombay$)\ (5)$ Vishakhapatnam $($Andhra Pradesh$)$
$(2)$ Kochin $($Kerala$)\ (6)$ Falta $($West Bengal$)$
$(3)$ Kandala and Surat $($Gujarat$)$ $(7)$ Noida $($Uttar Pradesh$)$
$(4)$ Chennai $($Tamil Nadu$)$​​​​​​​
  • In addition to the above, noted areas proposal of $18\ SEZ$ are in process.
  • In Andhra Pradesh in India maximum number of $SEZ$ are sanctioned.
  • If we look sector wise approved $SEZ,$ in the sector of $IT/TES/$Electronic Hardware is semiconductor and in second number is Biotech sector.
  • There is difference in $SEZ$ policy of China and India.
  • In China $SEZ$ are promoted by government in strategic area while in India most of the $SEZ$ are promoted by private sector companies, the objective of which appears to give tax benefit.
  • Therefore, $SEZ$ policy has not been proved effective to increase export.

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