Accra (Ghana): The government is expected to come out soon with new norms to revive special economic zones (SEZs), which have lost sheen after imposition of certain levies and proposal to take away tax incentives, a government official said.
"The Commerce and Finance Secretaries are discussing all the issues relating with these zones...We have to attract investments," Commerce and Industry Minister Anand Sharma said.
Sharma, who was leading a 200 member Ficci delegation, was here to inaugurate the three-day 'India Show'.
The government had imposed Minimum Alternative Tax (MAT) and Dividend Distribution Tax (DDT) on SEZs in 2010-11, which were earlier exempted from almost all levies.
Earlier, the minister had admitted that due to imposition of these levies, there has been a visible slowdown in growth of export from SEZs.
The Direct Taxes Codes (DTC) being considered by Parliament proposes to do away with the income tax exemption given to them and instead link tax sops to investments made in them. Profit-linked benefits were the main attraction of the SEZ scheme.
The initial phase of SEZ scheme, launched in 2006, saw developers lining up in big numbers for projects. It was also seen as a real estate opportunity.
To boost investors confidence in these zones, the government is planning incentives for developers who want to set up SEZs in remote and undeveloped areas.
According to sources, the government is considering to relax minimum land area requirement for different categories of SEZ, besides extending the benefits of export schemes to SEZ units, that are already available to entities outside the zone.
Exports from SEZs stood at Rs 3.65 lakh crore in 2011-12. With investment of Rs 2.02 crore, these zones provide employment to over 8.45 lakh.
Overseas shipments from the 153 operational tax-free havens have come down to 12 percent in the country's total exports from about 30 percent in the previous years.
Sharma added that reform measures were high on the agenda of UPA-II as India needs to attract investments to further boost the country's economic growth.
He said that measures like timely implementation of the Goods and Services tax (GST) would act as a big booster to the economy.
Strongly pitching for implementation of the GST, he said that it would give a big boost to the Indian economy and the gross domestic production (GDP) growth.
"Consultations are being held with the stakeholders and the Bihar Deputy Chief Minister, Sushil Modi, who heads the empowered panel on GST has been making quite an effort on the issue. The state governments are working through this panel to settle the issue and ensure a smooth implementation of GST regime," he added.
The GST regime is expected to be rolled out from April 1, 2013.
India's economic performance was deteriorated sharply as GDP growth slowed to 9-year low of 5.3 percent in the first quarter of this year. India's exports and foreign direct investments, too, was declined in the last few months.
"Things are certainly not looking up in the global scenario and we cannot remain isolated from the fallout. The crisis in the Euro zone and the slowdown in the world economy are pointers in that direction.
"We need to attract investments for various sectors especially infrastructure growth. India remains an attractive destination for foreign investment and I am sure the economy will bounce back sooner or later," Sharma said.