You need to know about the Special Economy Zone
The SEZ Full form is Special Economy Zone, a designated area or enclave inside the boundaries of a nation with more lenient economic regulations than the rest of the nation. This is a crucial subject that is included in the UPSC syllabus’s chapter on the Indian economy.
An SEZ is a territory inside a nation that normally enjoys duty-free status and has a unique business and commercial legislation primarily to promote investment and boost employment. SEZs are established to improve the administration of these areas, which will increase the convenience of doing business in addition to creating employment opportunities and encouraging investment.
Learning about Special Economy Zone
The SEZ is often established to support rapid economic growth in certain geographic areas. Utilizing tax incentives as a means of luring foreign capital and technological innovation, this economic expansion is achieved. SEZs may also boost export levels for the nation implementing them as well as other nations that provide it with intermediary goods.
A high level of administration may also be produced by the Special Economy Zone as a result of their regulatory needs. Diverting funds from the system may have the effect of decreasing its effectiveness. While there are advantages for enterprises, people, or entities working within an SEZ, there is disagreement regarding the macroeconomic and social advantages for a nation utilizing an SEZ model.
SEZ Approval Mechanism
The SEZ Full form is Special Economy Zone has a 19-member interministerial SEZ Board of Approval that provides the single-window SEZ approval system. A proposal must be submitted to the state government by the developer. Within 45 days, the state administration submits this plan and its recommendation to the BoA.
The BoA may also receive the proposal directly from the developer or applicant. Board which consists of 19 members and was established by the Central Government decides after weighing the merits of the proposal. A Board makes every decision by consensus and units may be created inside the SEZ when the BoA approves and the central government notifies the affected area.