India rebuts WTO on SEZs

New Delhi, May 25 (UNI) Rebutting the World Trade Organisation's (WTO) doubts on the efficacy of special economic zones (SEZs) in boosting investment and employment, India today said investment of eight billion dollar have already been made and more than 31,000 people have got direct employment in the SEZs.

Replying to observations made by the WTO secretariat in its review of India's trade policy at Geneva, Commerce Secretary G K Pillai said in 15 months since the SEZ Act and Rules were notified on February 10, 2006, investments of eight billion dollar have already been made and another 25 billion dollar investment is underway.

''As far as SEZs are concerned, I think the WTO secretariat was a little premature in expressing doubt about their effectiveness in boosting both investment and employment,'' he said.

He further said over 31,000 people have got direct employment and this is expected to rise to 100,000 by this year-end and to four million by 2010.

''The large number of textiles, gems and leather SEZs being established would provide employment for a less skilled labour force,'' he added.

The WTO secretariat, on the other hand, said India has lost a revenue of Rs 21 billion on account of tax holiday granted to investors in SEZs in the last financial year.

Quoting India's Finance Ministry's estimates, the WTO report said, ''revenue foregone from such schemes was Rs 538 billion in 2006-07, with an additional Rs 21 billion estimated for SEZs.'' The loss of revenue on account of schemes other than SEZs referred to by the WTO are export processing zones and export units which, like the SEZs, also get various tax exemptions.

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