Benefits of SEZ in India
SEZ stands for special economic zones. In India these SEZ are created and run by the government or private owners. They provide special economic laws which are market oriented to help with developing industrial growth in these particular areas. In other cases, organizations which are owned by the government usually perform as quasi-government groups whereby they work with a pseudo-corporate organizational composition while having total control over all their budget construction. The advantages are outlined below:-
1. Economic development
SEZ in India brings with it economic development, more so because it is an export-driven country. This consequently increases the economic growth of India and in terms of trade this is quite beneficial. This further positively affects the country’s gross national product.
Due to SEZ higher employment rates have been reported in India. Because SEZ fuels economic growth and higher output, there is a dire need to employ people in order to maintain the production of various commodities. As a result, more people are able to get jobs and this consequently gives them the buying power thereby raising their living standards.
3. Creates international ties
By creating the SEZ in India, the government provides a good and comfortable atmosphere for private firms to operate under. This in turn encourages foreigners who are interested in investing in the country to make new establishments in these zones. These operations foster international ties and thus, more exports. Further, because the SEZ have expedited customs procedures, good roads, low taxes, zero tariffs generally, this is enough to attract foreign investors
At the same time however, SEZ in India has some disadvantages. Many companies might be interested to join SEZ because of the tax concessions which are availed and this in return might have a significant impact on the government in terms of revenue loss.