- The committee headed by Baba Kalyani has proposed reincarnation of SEZs in India as ‘Employment and Economic Enclaves (3Es).
- The committee has proposed overhaul of the SEZ policy by shifting fiscal incentives from exports to investments made and employment generated.
- A special economic zone (SEZ) is an area in which business and trade laws are different from the rest of the country. For example- taxation benefits to units in SEZs.
- SEZs are located within a country’s national borders.
- SEZ aims include: increased trade, increased investment, job creation and effective administration,etc.
- The committee emphasized on development of last-mile and first-mile connectivity infrastructure.
- Supply of power directly to units in SEZ from Independent Power Producer (IPPs) at competitive prices.
- Integrated MSMEs with the 3E’s and giving additional incentives to zones focusing on priority industries.
- Tax benefits to be retained for the services sector.
- The committee suggested that flexibility should be considered to enable 3E units to seamlessly support businesses outside the zone.
Objective of the committee
- To make the SEZ policy WTO-compatible
- Encouraging manufacturing and the services sector
- Maximizing utilization of vacant land in SEZs