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Is The Present Sez Policy Appropriate

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Arpit Agarwal
Arpit Agarwal

The document discusses the SEZ Act and Rules in India, controversies around SEZs, proposed changes to improve the policy. It notes that there have been issues with land acquisition for SEZs, including taking agricultural land and lack of adequate compensation to farmers, which has led to widespread protests. It proposes safety nets for deprived farmers, using only non-arable land, and developing a new compensation model like profit-sharing for farmers. Suggested improvements include increasing the minimum area for processing to 50%, requiring new machinery in SEZs, and reducing tax exemptions.

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Vikram Singh Balakishore
SEZ Act and Rules SEZ Scheme April 2000 SEZ Act 2005 SEZ Rules Feb2006( First Amendment) March 2007 Second Amendment October 2007- Third Amendment
SEZ Controversies and Flaws Land Acquisition Agriculture land acquisition Land acquisition with force- Land grabbing Compensation to the farmers- Land acquisition act 1894 Wide spread riots: Nandigram
SEZ Controversies and Flaws cond Loss in revenues to the government Finance ministry estimates 100000 cr of loss until 2009-10 Tax sops to already developed industries- IT One job to the farmer family if eligible candidate is there
SEZ Controversies and Flaws cond 25% area for processing 35% area for processing 50% area for processing Rest of land REZ? SEZs in few states- TN,AP,UP,MH,GU,OR and HY Regional imbalances North east region
Comparison with China SEZs
Proposed Changes to improve the SEZ policy in India Need of safety nets for the deprived farmers Fertile/arable land should not be touched upon
New Compensation model for farmers Just like cooperative setups have been through the equity shares, similar concept can be developed to setting up SEZs by sharing the profits to farmers
Improvements Minimum area requirement for processing is 50% Existing plants with old machinery cannot be moved to SEZ New machinery is must Everything is not tax free in SEZ No Govt. involvement in land acquisition ( 10 to 30%) New resettlement and rehabilitation policy
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Is The Present Sez Policy Appropriate

  • 2. SEZ Act and Rules SEZ Scheme April 2000 SEZ Act 2005 SEZ Rules Feb2006( First Amendment) March 2007 Second Amendment October 2007- Third Amendment
  • 3. SEZ Controversies and Flaws Land Acquisition Agriculture land acquisition Land acquisition with force- Land grabbing Compensation to the farmers- Land acquisition act 1894 Wide spread riots: Nandigram
  • 4. SEZ Controversies and Flaws cond Loss in revenues to the government Finance ministry estimates 100000 cr of loss until 2009-10 Tax sops to already developed industries- IT One job to the farmer family if eligible candidate is there
  • 5. SEZ Controversies and Flaws cond 25% area for processing 35% area for processing 50% area for processing Rest of land REZ? SEZs in few states- TN,AP,UP,MH,GU,OR and HY Regional imbalances North east region
  • 7. Proposed Changes to improve the SEZ policy in India Need of safety nets for the deprived farmers Fertile/arable land should not be touched upon
  • 8. New Compensation model for farmers Just like cooperative setups have been through the equity shares, similar concept can be developed to setting up SEZs by sharing the profits to farmers
  • 9. Improvements Minimum area requirement for processing is 50% Existing plants with old machinery cannot be moved to SEZ New machinery is must Everything is not tax free in SEZ No Govt. involvement in land acquisition ( 10 to 30%) New resettlement and rehabilitation policy