SPECIAL Economic Zones (SEZs), offer India an excellent opportunity for giving a big push to its growth performance. The focus of economic policy debate in India has decisively shifted to a regime that exhibits strong export orientation. Looking back, high and sustained economic growth of any nation is preceded by these kinds of shifts. It is expected that SEZs would become the country's landmark of infrastructure excellence which would supplement the supply of real estate, improve investments and generate the much required employment.

It has been two years since the Special Economic Zone (SEZ) Act and Rules came into effect. While exports have grown almost 100 per cent to touch Rs 40,000 crore in the first nine months (April-Nov 08), total incremental employment generated by the operational SEZs after February 2006 is 146,128, according to the Export Promotion Council for EOUs and SEZ (EPCES). Total incremental investment during the same period is over Rs 70,416 crore. Currently 42 SEZs are operational in the country, while 197 zones have been notified and are in process of development.

IT & ITES 'SEZ'
By 2010, over 60-70 million sq ft of IT/ITES specific office space is expected to come up through SEZs alone in India. About 57% percent of the notified SEZs belong to the IT/ITES category. IT/ ITES SEZs have been extremely attractive for Foreign Direct Investment (FDI), having received an estimated FDI of Rs. 34.29 crore/ hectare as compared to Rs. 0.89 crore/ hectare for non IT/ ITES SEZs..Of the IT/ITES space expected to come up in 7 major cities, Pune would lead with nearly 24 million sq. ft. of the total supply estimated to come up by 2011 - 12. Of the direct employment potential of SEZs estimated at 2.1 million by 2009-10, over 60% is to be generated by IT/ITES sector alone. Over 1.3 million additional jobs proposed to be created by IT/ITES SEZs are nearly at par with the current level of employment in the sector.

Benefits to the units operational within SEZs:

CENTRAL GOVERNMENT INCENTIVES
1. Duty-free import/domestic procurement of goods for development, operation and maintenance of SEZ units.
2. 100% Income Tax exemption for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
3. Exemption from minimum alternate tax under section 115JB of the Income Tax Act.
4. External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.
5. Exemption from Central Sales Tax.
6. Exemption from Service Tax.
7. Single window clearance for Central and State level approvals.
8. Exemption from State sales tax and other levies as extended by the respective State Governments. (Section 7.26 and second schedule)

STATE GOVERNMENT INCENTIVES
1. Exemption from the State and local taxes, levies and duties, including stamp duty.
2. Exemption from electricity duty or taxes on sale of self generated or purchased electric power for use in the processing area of a Special Economic Zone.
3. Allow generation, transmission and distribution of power within a special Economic Zone subject to the provisions of the Electricity Act, 2003 (No. 36 of2003).
4. Providing water, electricity and such other services, as may be required by the developer.
5. Delegation of power to the Development Commissioner under the Industrial Disputes Act 1947 (No. 14 of 1947) and other related Acts in relation to the Unit.
6. Delegation of power to the Development Commissioner under the Industrial Disputes Act 1947 (No.14 if 1947) in relation to the workmen employed by the developer.
Declaration of the Special Economic Zone as a Public Utility Service under the Industrial Disputes Act 1947 (No. 14 of 1947).1. Providing single point clearance system to the Developer and unit under the State Acts and rules.
2. The State Government shall, while recommending a proposal for setting up of Special Economic Zone to the Board indicate, whether the proposed area falls under reserved or ecologically fragile area as maybe specified by the concerned authority.