Economic survey pumps for special economic zones

New Delhi, Feb 28 (UNI) The Economic Survey today strongly defended special economic zones, saying fears on misuse of the scheme are 'ill-founded' and benefits derived from it far outweigh revenue losses on account of tax exemptions in these tax-free enclaves.

Tabled in Parliament today by Finance Minister P Chidambaram, the survey 2007-08 said exports from SEZs grew by 52 per cent to Rs 67,088 crore in 2006-07 from Rs 22,840 crore in 2005-06.

It said 1,227 units operating in SEZs set up before the scheme was legislated in 2005, provided direct employment to over two lakh people, 40 per cent of whom are women. Of this, 36,463 people are employed in private and state government SEZs, most of which were set up after February, 2006 when rules governing it were framed. The newly notified SEZs provided direct employment to 61,015 people, it added.

The survey said as against an investment of Rs 7,104 crore before enactment of SEZ Act, 2005, a whopping Rs 67,347 crore has already been invested in newly-notified SEZS which came up after February 10, 2006.

On apprehensions of misuse of the scheme by promoters by relocating existing industries into SEZs to derive tax benefits, the survey said, ''these apprehesions are ill-founded and fresh investments and employment have been flowing into the special economic zones.'' Giving illustrations to corroborate its findings, the survey said Nokia electronics hardware SEZ in Sriperumbudur has already employed 6,637 people, majority of them being women. Similarly, Hyderabad Gems SEZ has employed 2,000 people after training them and 1,200 of them are girls. Promoters have projected direct employment to 30,000 people, the survey added.

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