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Q. NITI Aayog on coastal economic zone: Comment on NITI Aayog’s proposal on development of coastal economic zones.
Oct 14, 2016 Related to : GS- Paper-3

Ans :

Introduction-

NITI Aayog, premier think tank of government of India is has recently proposed for creation of coastal economic zones (CEZs) based on the Shenzhen-style Chinese model of coastal economic zones to boost India’s manufacturing sector.

NITI Aayog on CEZs-

  • NITI Aayog has pushed for a 10-year corporation tax holiday for proposed coastal economic zones (CEZs) provided these generate a threshold of employment.
  • Similarly it has proposed that state governments should undertake reforms in land and labour laws.
  • The goal of these proposals is to attract large manufacturing firms to serve the export market.
  • Similarly it will give a fillip to Make in India initiative and port-led industrialisation.

Analysis-

  • The NITI Aayog’s aim to attract large manufacturing firms and boost make in India initiative is laudable. But giving tax and legal benefits to specific areas by ignoring other parts have raised question on these proposals.
  • Similarly the new proposals have ignored the experience of special economic zones (SEZs) and the new anti-globalisation climate in target export markets. SEZs did not take off on any large scale because they did not suit India’s political economy.
  • The model based on China’s past success story may not suit in contemporary India and may not deliver same results.
  • Hence instead of focussing on area specific rules and tax concessions, government should focus on uniform norms to promote manufacturing in India.
  • There is no reason why the entire country cannot have robust infrastructure, functional and speedy administration and sensible taxation.
  • Hence government should focus on creating economy-wide competencies to raise manufacturing’s share in the economy and must promote Make In India initiative throughout country uniformly.

Conclusion-

Currently Government of India is focussing in promoting manufacturing units in India through various measures. Development and concession to CCEZ’s are part of these initiatives, though intent of it is good, but it creates differential treatment within the country. Hence government should focus on promotion of Make In India campaign throughout the country without any differential treatment.


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