Exports from SEZs up 64% to Rs 1.18 lakh crore in April-June

NEW DELHI: Exports from special economic zones (SEZs) grew by 64 per cent year-on-year to Rs 1.18 lakh crore during the April-June period, Export Promotion Council for EOUs and SEZs (EPCES) said today.

"In-spite of prevailing recession around globe, SEZ sector has shown fabulous growth," the council said in a statement today.

Out of 588 approved SEZs, or export hubs, 386 are notified and only 158 are operational.

However, these tax-free enclaves have lost sheen after imposition of certain levies and proposal to take away tax incentives.

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.

"Implementation of MAT/DDT has adversely affected the growth, investments, employment and exports from SEZs and resulted in loss of valuable foreign exchange for the country and has also sent wrong signals to the international investment community which is looking at India for its resources of skills and manpower," it said.

The tax incentives were the main attraction for setting up of these export enclaves.

The council has sought intervention of Prime Minister Manmohan Singh to restore tax holidays for SEZs, which was originally promised in the SEZ act.

"...SEZs should also be given some long-term benefits thereby bringing back this neglected sector, to its established state," it added.

The council also asked the government to implement the recommendations of Export-Oriented Units (EOU) Committee to revamp these units.

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.

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 persons.