Exports From Sezs Rise By 200-Pc In 2 Yrs

New Delhi: The Special Economic Zone (SEZ) Act of 2005, which completed two years on February 10, 2008, has witnessed a 200 per cent growth in exports from these zones during the period, and has led to an incremental investment of Rs 70,416 crore. However, developers of the zones are skeptical of finance ministry proposals, which seek to reduce fiscal incentives provided under the Act and maintain that investments of $75 billion, lined up in the next five zones, could be at stake. The finance ministry has proposed imposing export obligation in excess of 51 per cent on SEZs as well as imposing direct tax measures like Minimum Alternative Tax and Dividend Distribution Tax. Investors, including ones from abroad like Nike, have lined up long-term investment plans. If fiscal incentives are trimmed, proposed investments would be in jeopardy as investors would back out, said Ajay Nijhawan, convenor of the panel of SEZ developers within the Export Promotion Council for SEZs and EoUs (export-oriented units). According to the source, between 2003-04 and 2005-06, total value of exports from SEZs stood at Rs 50,000 crore. In 2007-08, we are likely to have exports worth Rs 67,088 crore from SEZs and in 2008-09, these are likely to cross Rs 1,00,000 crore. According to developers, the issue of revenue leakage due to SEZs is notional. Other issues pertaining to the SEZs include classification of SEZs as real estate projects by the RBI.