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Who SEZ so?
They’re the biggest loss makers
There was quite a lot of apprehension regarding Special Economic Zones (SEZ) since their inception. The recent review on SEZ by Comptroller and Auditor General (CAG) fortifies the same apprehension. CAG review concluded that these SEZ are favouring corporates at the cost of state revenue. The review further proves that there were systemic weaknesses that caused lost revenues to the tune of Rs.246.72 crores and an irrecoverable loss of Rs.1,724.67 crores.
Moreover, due to subsidy and tax holiday, the government had a loss of Rs. 8,842 crores [during the period 2000-01 to 2005-06] against an estimate of Rs.2,146 crores. Even the duty freedom was not given once but twice – once on the inputs used and again on the finished products from the SEZs. The duty foregone on the inputs are irrecoverable as there is no provision of paying back.
It’s quite cleat that SEZs [that are framed on half-backed logic and parameters] will do more harm than good. The latest report by CAG makes it important to re-think on the modus operandi of SEZ. It’s important to think on SEZ with respect to revenue losses and tax holidays. The current discussion of impact of SEZ on agriculture has actually overshadowed the matter of revenue loss by SEZ. The CAG’s report has again proved the apprehension true and also has added a new dimension that SEZ are economic disasters as well.
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