Special Economic Zone help to attract foreign companies to invest in India
Answers
A Special Economic Zone (SEZ) is a geographical region that has economic laws more liberal than a country's typical economic laws. It is a trade capacity development tool, with a goal to promote rapid economic growth by using tax and business incentives to attract foreign investment and technology. By offering privileged terms, Special Economic Zones attract investment and foreign exchange, spur employment and boost the development of improved technologies and infrastructure.
In India, Special Economic Zones are being established in an attempt to deal with infrastructural deficiencies, procedural complexities, bureaucratic hassles and barriers raised by monetary, trade, fiscal, taxation, tariff and labour policies. Since country-wide development of the infrastructure is expensive and implementation of structural reforms would require time, ( Special Economic Zones/Export Processing Zones) are being established as industrial enclaves for expediting the process of industrialization.
One of the earliest and most famous Special Economic Zone was founded by the government of the People's Republic of China under Deng Xiaoping in the early 1980s.
Government of India in April 2000 announced the introduction of Special Economic Zones policy in the country. As of 2007, more than 500 Special Economic Zones have been proposed, 220 of which have already been created. This has raised the concern of the World Bank, which questions the sustainability of such a large number of Special Economic Zones.
ANSWER:
Sezs help to attract the foriegn companies to invest in india in the following ways:
(a) It helps in improving the financial position of the people by accelerating growth of the economy
(b) It creates new job opportunities in the country , directly as well as indirectly in support services
(c) The government gains from additional tases levied on the profit made from the foriegn investment.
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