Shri Kamal Nath, Minister for Commerce & Industry, on February 9,2006, announced that the Special Economic Zones (SEZs) Act 2005 would come into force with effect from tomorrow, 10th February, 2006, with SEZ Rules having been legally vetted, approved and now ready for notification.
The SEZ Rules, inter-alia, provide for drastic simplification of procedures and for single window clearance on matters relating to central as well as state governments.
Investment of the order of Rs.100,000 crore over the next 3 years with an employment potential of over 5 lakh is expected from the new SEZs apart from indirect employment during the construction period of the SEZs.
Heavy investments are expected in sectors like IT, pharma, bio-technology, textiles, petro-chemicals, auto-components etc.
SEZs in India have hitherto been functioning under the provisions of the Foreign Trade Policy and are eligible for fiscal incentives as provided under the relevant statutes. To instil confidence in investors and signal the Government's commitment to a stable SEZ policy regime, a comprehensive Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 and received Presidential assent on the 23rd of June, 2005.
With the Act and Rules in place, it is expected that many large format, multi-product SEZs that have so far been unable to achieve financial closure will now quickly move towards such closure.
It is anticipated that this will trigger a large flow of foreign and domestic investment in SEZs, in infrastructure and productive capacity, leading to generation of additional economic activity and creation of employment opportunities, Shri Kamal Nath said.
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