Special growth areas

SPECIAL Economic Zones (SEZs) are specifically delineated duty-free enclaves, treated as foreign territory for the purpose of industrial, service and trade operations. They enjoy exemption from custom duties and have a more liberal regime in respect of levies, foreign investment and other transactions as compared to other sectors. The idea is to create a hassle-free environment with freedom from domestic regulations, restrictions and infrastructural inadequacies. Procedures are simplified and labour laws liberalised in these zones.

According to Government of India guidelines, SEZs can be developed in the public, private or joint sector or by the State governments. These agencies are expected to promote the creation of large, self-contained areas supported by world-class infrastructure, oriented towards export production. SEZs are, therefore, expected to bring in large dividends to the State in terms of economic and industrial development and employment opportunities.

Development Commissioners are deemed to be the appropriate development authority for the notified areas that fall under an SEZ. As in SEZs operating in other parts of the country, special emphasis will be laid on the development of product specific zones in the SEZs in Rajasthan to harness the potential within the State in the field of gems and jewellery, handicrafts and woollen carpets, which would result in an increase in the export of these commodities with a high value addition. SEZs are to be set up in Jaipur, Jodhpur, Bikaner, Bhiwadi and Abu Road.

In order to move this process forward, the State government has formulated a package of concessions and incentives, which have been approved by the Board of Infrastructure Development and Investment Promotion (BIDI), chaired by the Chief Minister. In the first phase, it is envisaged to set up gems and jewellery units at Sitapura in Jaipur and handicraft units at Boranada in Jodhpur through the Rajasthan State Industrial Development and Investment Corporation (RIICO). In the subsequent phase, the private sector will be encouraged to develop SEZs for which offers will be invited for both multi-product and product-specific SEZs at strategic places.

The developers of SEZs and industrial units and other establishments within the SEZs will be exempted from all State and local taxes and levies, including sales tax, purchase tax, octroi and cess, in respect of all transactions made between units/establishments within the SEZs and in respect of supply of goods and services from the domestic tariff area to units/ establishments in the SEZs. Further, all industrial units and their expansions located in the SEZs will be exempted from payment of stamp duty and registration fees. Electricity distribution companies would ensure continuous and quality power supply within the SEZs, and industrial units and other establishments within the SEZs will be allowed to generate power for their use - a proposal to permit the sale of surplus power to the grid is under way. The State government shall provide high-standard facilities with regard to water supply and effluent treatment and disposal from its own resources.

More importantly, as proposed in other SEZs, in the matter of labour regulations, the State governments will declare units within the SEZ "public utility service" under the provisions of the Industrial Disputes Act. The powers of the Labour Commissioner, Government of Rajasthan, shall be delegated to the designated Development Commissioner in respect of the SEZs. Basically, the Labour Commissioner will have no jurisdiction over the SEZs and arbitration powers in the matter of labour disputes in them. The State government will make all appropriate arrangements for the maintenance of law and order within the SEZs. All clearances and approvals for the units located in the SEZs would be provided under the Single Window System. The government would allot land to the developer on concessional rates.

The SEZs will be connected to national highways or State highways through roads built by the Public Works Department of the State government from its own resources. Besides, facilities such as police stations, dispensaries and educational institutions will be provided in the SEZs by the departments concerned on a priority basis. Above all, a high-powered committee empowered with the power to take decisions with regard to the development of SEZs in the private sector, will also be set up. This committee, constituted by the State government, would resolve various issues pertaining to the promotion, development and functioning of the SEZs in the State.