The Promised Land of SEZs

Seminar, 22 September 2008

IN the last year, Special Economic Zones (SEZs) were a much discussed issue. Most of the discussion focused on two issues, viz. (a) the acquisition of land, rehabilitation, the consequences for farmers and agricultural output, and (b) the cost of the various tax benefits provided to developers of SEZs and the units to be located in them. While these are important issues, they address only the cost aspect of the equation. Taking another path, this paper tries to determine the expected benefits from SEZs and whether they are being achieved. For this, it relies not on aggregate data but on projections made by the developers of individual SEZs that form the basis of claims advanced by the Ministry of Commerce and Industry. What does the data say about the promised land of SEZs, the exports, the nature of investment and employment, regional dispersion and governance?