What is the meaning of SEZ? Mention any three features of SEZ.

Industrial zones, called Special Economic Zones (SEZ) are set up by the Central and State governments in India to attract foreign investment.

1. These zones provide world-class facilities including electricity, water, roads, transport, storage and recreational and educational facilities.

2. Companies setting up production units in these SEZs do not have to pay taxes for an initial period of five years.

3. The Government has allowed a high degree of flexibility in labour laws. For example- instead of hiring workers on a regular basis, companies can hire workers ‘flexible’ for short periods of time when there is the intense pressure of work, thus allowing the companies to reduce the cost of labour.

NOTE – The SEZ’s are majorly constructed for the benefit of the foreign investors in the domestic market of the country. With the only purpose of attracting foreign investment, government has allowed high degree of flexibility in laws governing foreign investment in India often at the cost of Indian people.