Special Economic Zones Act to be reformed in Budget

The Special Economic Zones Act, 2005, is going to be reformed in the upcoming budget, as a major push to boost the sector. Sources told Business Today TV that the government is likely to give Special Economic Zones status, which will allow these projects to get benefits like lower borrowing rates, tax concessions, and increased flow of foreign and private capital.

Special Economic Zones SEZ would be in a position to accept payment in rupee.

The Budget could focus on attracting international investors to Special Economic Zones. The move would encourage and promote investment of single, multi-partner and international companies in the SEZ.

SEZ exports fell to $102.3bn in the financial year 2020 -- 21 from $112.3bn in the previous financial year. Amendments could be made to the sunset clause in the upcoming budget. The sunset clause said only those units that started production on or before June 30, 2020 would be granted a phased income tax holiday for 15 years.

Major changes in SEZ legislation will be based on the expert committee headed by Bharat Forge Chairman, Baba Kalyani who submitted a report in November 2018 to revitalise these zones and help achieve India's merchandise-export target of $1 trillion by the year 2027 -- 28.

The SEZ Act was passed in Parliament in 2005, followed by rules promulgated in February 2006 with the aim ofattracting foreign direct investment, developing world-class infrastructure, and creating a competitive and hassle-free environment for companies that are active in exports of goods and services.

Deloitte believes that the economy is positive, says Deloitte.