Economics • Indian EconomyHard
What is the primary purpose of the 'Special Economic Zones (SEZs)' policy framework established in India?
A. To generate additional economic activity and promote exports of goods and services with minimal regulatory burdens✓ Correct Answer
B. To nationalize loss-making heavy manufacturing units and convert them into public sector cooperative hubs
C. To provide universal basic income guarantees to workers employed in unorganized textile clusters
D. To decentralize agricultural procurement centers and establish state-level food grain storage silos
💡 Solution & Explanation
The Special Economic Zones Act, 2005 was enacted to promote rapid economic growth, encourage domestic and foreign investments, and boost export competitiveness by providing a hassle-free operational environment. Distractors mischaracterize SEZs as nationalization instruments or universal income schemes. These enclaves enjoy exemptions from certain customs duties, labor flexibilities, and tax holidays for initial operational years. The policy aims to integrate Indian manufacturing value chains with global supply networks.
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