X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Is a revival for SEZs on the cards?
Wed, 20 Aug Pre-Open

Among various things, Prime Minister Narendra Modi, in his maiden Independence Day speech laid emphasis on improving the manufacturing sector and hence emphasized on revival of Special Economic Zones (SEZ).

Boosting development of SEZs has been usually linked to enhancing foreign direct investment (FDI) and exports activity in the country. Better manufacturing of quality goods and at competitive rates can help boost exports and thus reduce the trade deficit. Over and above it provides job opportunities.

However, lack of proper policies for SEZ and implementation of these policies have been a big question mark. And thus India's SEZ model has not reaped the fruits as compared to China. SEZs are considered an important contributor to China's economic success.

There are some shortcomings of the Indian SEZ model, the biggest culprit among various things, being misuse of land acquired for manufacturing. As per an article in a leading financial, in May 2013, out of 560 approved SEZs only 160 are working. There have been various instances where the land was being acquired for industrial purposes but then diverted for other uses, such as retail establishments and recreational amenities for high-end residential accommodation. Not just that, the land which is acquired for manufacturing purpose, is not utilized at all.

Other things such as policy flip flops, plus factors like lack of infrastructure and overlapping taxes have plagued the advantages the country could reap from these SEZs.

Currently India is facing various pressures such as slowing GDP growth, firm inflation, rising deficits; SEZs can be considered to be a key catalyst for industrial growth.

Thus, if the government gives some serious efforts and is able to bring a turnaround in SEZs, there could be a significant revival in the industrial sector. However for this the government needs to make sure that there are clear cut policies available. While the Modi government has already showed interest in the development of infrastructure, there are still other grey areas which the government needs to address. Among various things, the Government should keep watch on the operations of these SEZs and check whether the land is being utilized for the right purpose. Establishing a legal framework by a distinct governing body can give a better outcome. Further, higher clarity on tax aspect is something the government needs to address.

Overall, it would be interesting to see what steps the government takes to bring about a turnaround in SEZs going forward.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

Equitymaster requests your view! Post a comment on "Is a revival for SEZs on the cards?". Click here!

  

Views on News

Great Managers Make Great Investments - Especially in These Companies (Profit Hunter)

Sep 14, 2018

Leadership changes are part of a company's lifecycle. Do such changes warrant a change in view? Read on to find out...

Count on These Stocks to Create Permanent Wealth... (Profit Hunter)

Aug 8, 2018

In stock markets, winning is not about buying the next multibagger...but making sure that the wealth you have made on a stock grows across economic and market cycles...

President Trump's Real Test (Vivek Kaul's Diary)

Jun 6, 2018

Donald Trump refers to making America great again. As per him the tax cuts are working. But is that the entire truth? Bill Bonner offer insights on the same.

Insider Leaks Equitymaster Stock Picks (The 5 Minute Wrapup)

Jul 25, 2017

Equitymaster HQ has been infiltrated. Valuable stock ideas have been leaked. Who's responsible?

Raymond and Other 'For Profit' Companies Who Don't Care about Shareholder Returns (The 5 Minute Wrapup)

May 27, 2017

What happens when minority shareholders are short-changed in the normal course of business?

More Views on News

Most Popular

In a Crisis, if Petrol Prices Hit Rs 100, This Stock Could Be a Good Buy(The 5 Minute Wrapup)

Sep 6, 2018

The rise in the crude oil price is a major reason for the fall in the market. If crude oil prices keep on rising, what will happen to stocks?

Want Bigger Returns Than You Thought Possible? This is Where You Should Look(Profit Hunter)

Sep 12, 2018

Richa has discovered the single most profitable opportunity in the market - read on to discover more...

The Secret Of Mirae Asset India Equity Fund's Increasing Popularity(Outside View)

Sep 7, 2018

The prudent investment strategies followed at the fund house has helped Mirae Asset India Equity Fund earn a tag of being a consistent performer, which is in turn gaining popularity among investors.

Hurricanes Threaten Oil Spike, but the Saudis are Selling...(Vivek Kaul's Diary)

Sep 6, 2018

Oil prices are rising and could go even more higher amid rising tensions in Middle East.

Should You Be Worried About the Rising Dollar?(Chart Of The Day)

Sep 7, 2018

While the rupee has deprecated by about 5% annually since 1990 against the dollar, the BSE Sensex has returned 14% annually in the same period.

More

Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS