GJEPC Submits Recommendations on SEZ Revival

sez logoMumbai: The Gem & Jewellery Export Promotion Council (GJEPC) has submitted a report to the Ministry of Commerce, Government of India outlining detailed recommendations on the steps that should be taken for the revival of manufacturing activity in the Special Economic Zones (SEZ). The recommendations fall into three broad categories – related to SEZ Functioning, Tax Policy Support and Business Process Streamlining.

The study report states that if there are no changes in policy, then the industry will continue to see sub 5% CAGR, but active intervention in policy and processes can see exports grow at a CAGR of about 15% and reach Rs 1,21,000 cr with the creation of an additional 1.5 lakh jobs by 2018-19.

Among the key issues raised by the Council are implementation of a Single Window Clearance to reduce paperwork (currently there are around 15 government touch-points and 32 documents); withdrawal of Minimum Alternate Tax (MAT – 18.5%) and Dividend Distribution Tax (DDT – 15%) and the creation of an export-friendly tax regime; relaxation of restrictive labour laws that prevent companies from achieving flexibility needed to cater to seasonal demand spikes; and the creation of Common Facility Centres to boost MSME operations.

The Council has also listed a number of other changes in policy and practical matters covering general issues related to all manufacturing units within the zones (creating a paperless SEZ, Policy for exit from the zones) as well as some that are specific to the jewellery industry (work towards revival of GSP benefits, relax unrealistic time limits on return/repair).

“Our submissions have been well received by the government,” says Colin Shah, Convener, Jewellery Panel Committee of GJEPC, “and they have, in principle, given us a green signal on proposals like setting up of centres where smaller entrepreneurs can avail of casting, refining, polishing, etc on a pay-as-you-use basis.”

Shah adds, “This will encourage entry of new entrepreneurs who may not have the capital required to set up a full-fledged unit, but have the skills and the vision to succeed in the export markets.”

Sabyasachi Ray, Executive Director, GJEPC said that the study has adopted a holistic approach and pointed out that nearly 60% of the recommendations were applicable to all SEZs. “Every suggestion has been linked to actual practical examples taken from the operations of SEZs in other countries like Thailand, China, Turkey etc.,” he said.

While adding that “the government has responded positively to our suggestions”, Ray notes that the study is aligned to three key programmes put forward by the Modi government – boost to manufacturing in SEZs, increase exports to strengthen forex earnings and its ‘Make in India’ strategy plank.

Entitled “Strategy for Enhancing India’s Jewellery Exports from the SEZs”, the report has been prepared by Accenture after gathering inputs from 35 Indian companies and 18 government functionaries, as well as holding extensive discussions with two SEZ committees (Export-Import and Human Resource) and six subject matter experts. The study spanned four countries (India, Turkey, China, and Thailand) and six Indian states (Maharashtra, Gujarat, West Bengal, Delhi-NCR, Rajasthan, and Uttar Pradesh).