This book is a systematic analysis of the special economic zone (SEZ) programme in India. The book highlights the critical importance not just of investment in SEZs but also of investment in the wider domestic economy in which they operate. It is the result of detailed surveys of SEZs conducted at different points in time during 2004–9. It traces the history and evolution of SEZs in general and in India, and examines the justification of continuing with SEZs in India. It covers almost every aspect of the benefit and cost of SEZs and finds that they can be instrumental in economic and social transformation. However, merely setting up an SEZ is not sufficient; it requires a comprehensive strategy to develop networks between SEZs and various actors in the domestic economy with an explicit emphasis on the promotion of industrial activity outside SEZs. This would enhance backward and forward linkages of SEZs with the domestic economy and strengthen the growth processes triggered by them. There is thus a need to integrate them with the broader industrial policy. While SEZs do entail costs, these can be addressed through a long-run vision, strong commitment, a pragmatic and flexible approach, dynamic learning, and institution-building.
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