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Conference Reports |
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Paul Anthony
Development Commissioner, Cochin, SEZ
Mr. Anthony talked about the SEZ effort in India. He started by talking about the initial structure of the SEZs, where the Central Government was an active participant while the State government played a passive role. As compared to this, in China, the provincial governments played an important role in setting up SEZs.
However this structure has undergone radical change since November 2000. States are now given funds for export related infrastructure on the basis of their share in the nation's exports. In addition state governments play a major role in setting up of SEZs and SEZs can be publicly, privately or jointly set-up. Further, to ensure de-risking, state governments are required to make certain commitments.
Further he explained the difference between Economic Processing Zones (EPZs) and Special Economic Zones (SEZs) where apart from the processing area, SEZs also contain non-processing areas such as roads, airports, water supply points. SEZs are in that sense, integrated townships.
Another question that he addressed is why FDI is higher in China. This he attributed to hard and soft infrastructure issues. Therefore, the aim of the SEZs remains to ease soft infrastructure issues i.e. regulatory issues. Further SEZs in this regard have now been empowered to give licences for 100% FDIs and to allow all types of activities, inclusive of manufacturing, services, assembling and trading. Further, operational freedom has been given. For example, 100% remittance of proceeds in foreign currency is allowed.
He concluded by stating the current achievements and what needs to be done. So far 8 EPZs have been converted to SEZs and 12 state governments have been empowered to decide SEZ policy. Further, issues that remain to be addressed are the bureaucratic hassles, excessive export orientation and area allocation of SEZs.
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