Fiscal sops for SEZs must be linked to investments, jobs: Panel

Fiscal sops for SEZs must be linked to investments, jobs: Panel


  1. The committee headed by Baba Kalyani has proposed reincarnation of SEZs in India as ‘Employment and Economic Enclaves (3Es).

Important Facts:

  1. 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.
  1. The committee emphasized on development of last-mile and first-mile connectivity infrastructure.
  2. Supply of power directly to units in SEZ from Independent Power Producer (IPPs) at competitive prices.
  3. Integrated MSMEs with the 3E’s and giving additional incentives to zones focusing on priority industries.
  4. Tax benefits to be retained for the services sector.
  5. 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
Categories : Test 1 (5004)
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