Special Economic Zones (SEZs) are engines of economic growth. Discuss.

Special Economic Zones (SEZs) are created to over-come the short comings experienced on account of multiplicity of Controls and Compliances, absence of world class infrastructure and unstable fiscal regime; with a view to attract larger foreign investments in the Country. One of the main objectives of SEZ is to enhance exports, i.e. to have a prominent role in international business. A main factor in determining the success of SEZ is growth in the exports made by them. The purpose behind their establishment is to provide an internationally competitive environment to increase export, by making available goods and services free of tax and duties supported by convergent infrastructure. These are engines of growth for nations that have strong governments. SEZs are located within a country's national borders, and their aims include increasing trade balance, employment, increased investment, job creation and effective administration. To encourage businesses to set up in the zone, financial policies are introduced. These policies typically encompass investing, taxation, trading, quotas, customs and labour regulations. Additionally, companies may be offered tax holidays, where upon establishing themselves in a zone, they are granted a period of lower taxation. The units in SEZs are: - 100% tax exempted on export income for particular period. Exemption from MAT. ECB. Exemptions from Central Sales Tax Exemption from Goods & Services Tax Single Window clearance for Central and state level approvals Exemption from state sales tax and other levies. A country has many benefits by the set-up of Special Economic Zones inside its territorial limits. Some of these are as follows: Special Economic Zones promote exports of goods and services. SEZs generate employment opportunities for the population. Special Economic Zones can develop infrastructure facilities. SEZs can provide, in a concentrated area, the necessary conditions external investors may require. Moreover, these may include a skilled labor force, adequate infrastructure, and local input suppliers. Additionally, they can facilitate investment from foreign sources. Additionally, a well-executed SEZs helps generate spill-overs for the economy of the rest of the country. This is because domestic firms and industries outside an SEZ tend to up-skill and expand, to be able to supply the SEZ firms. SEZs can play the role of 'testing grounds' for the Government for implementing liberal business policies in the future. Likewise, the Government can decide to implement 'successful' policies across the country and dump the 'unsuccessful' ones.