Special Economic Zone-SEZ in Rajasthan

Special Economic Zone SEZ in Rajasthan

India was one of the first countries in Asia to recognise the effectiveness of the Export Processing Zone model in promoting exports, with Asia’s first EPZ set up in Kandla in 1965. This was followed by Santacruz electronics EPZ, Mumbai (1973) and Chennai EPZ (1984).

The Special Economic Zones (SEZs) Policy was announced in April 2000. However, SEZs in India functioned from 1.11.2000 to 09.02.2006 under the provisions of the Foreign Trade Policy. To instil confidence in investors and to stabilise SEZ policy regime, the Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 which received Presidential assent on the 23rd of June, 2005. After extensive consultations, the SEZ Act, 2005, supported by SEZ Rules, came into effect on 10th February, 2006.

Rajasthan’s proximity to the Delhi International Airport and ports of the western coast, makes it an ideal location for export-oriented industrial development on a large scale. 40% of the Delhi-Mumbai freight corridor is passing through Rajasthan throwing up enormous possibilities for development of industrial belts such as special economic zones along the corridor.

Definition of Special Economic Zone (SEZ)

According to the Ministry of Commerce and Industry, “Special Economic Zone (SEZs) is a specifically Delineated duty free enclave and is a deemed foreign territory for the purpose of trade operations, duties and tariffs.”

There are three categories of SEZs in India are:

  • Central Government SEZs,
  • State Govt/Private SEZs, established prior to SEZs act and
  • SEZs notified under SEZs Act 2005.

Objectives of SEZ:

The objectives of SEZs can be explained as :

  • (i) Generation of additional economic activity;
  • (ii) Promotion of exports of goods and services;
  • (iii) Promotion of investment from domestic and foreign sources;
  • (iv) Creation of employment opportunities;
  • (v) Development of Infrastructure facilities.

Contribution of SEZ:

  • SEZs help to provide employment to skilled, semi skilled and unskilled labour at large scale.
  • SEZs contribute significantly to exports.

Special Economic Zones in Rajasthan

Rajasthan came up with an SEZ policy and ACT in 2003 with major focus on Gems & Jewellery and handicrafts. Consequently, a SEZ was setup in Jaipur for Gems & Jewellery and one in Jodhpur for handicrafts. After 2005, the new SEZ’s came up under the Government of India Special Economic Zones Act 2005.  In 2015, the Rajasthan Assembly passed the new Rajasthan SPECIAL ECONOMIC ZONES ACT, 2015 with to provide for the establishment, maintenance, management and administration of Special Economic Zones in the State.

The Government of Rajasthan is promoting the development of several SEZs across the state for sectors such as gems and jewellery, handicrafts, IT, electronics, automotive/auto components and textiles.

Six SEZs have already notified. These are:

  • 1. Mahindra World City (Jaipur) Ltd., Jaipur
  • 2. Somani Worsted Ltd., Khushkeda, Bhiwadi, Alwar
  • 3. Genpact Infrastructure (Jaipur) Pvt. Ltd., Jaipur
  • 4. Vatika Jaipur SEZ Developers Ltd., Jaipur
  • 5. Mansarovar Industrial Development Corporation, Jodhpur
  • 6. RNB Infrastructure Private Limited, Bikaner

Major Benefits offered by SEZ’s in Rajasthan

  • Land conversion @Rs.100/- to developers in rural areas.
  • 100% exemption on stamp duty to developers and to units in RIICO SEZs.
  • 50% exemption on electricity duty for seven years.
  • 100% exemption from work contract tax to units and developers for seven years.
  • 100% exemption from entry tax on capital goods brought into local areas by the unit required for use as capital goods for setting up industry in SEZs.
  • 100% exemption from luxury tax for seven years.
  • 50% exemption from entertainment tax for seven years.

References:

  • Rajasthan SEZ policy 2003: PDF
  • Rajasthan SEZ Act 2015: PDF
  • Official Website GoR – Link