The major argument for and made against of SEZs.

The major arguments for SEZs are therefore the following:

i. Can attract global manufacturing companies;

ii. Can bring investment into the infrastructure sector;

iii. Can help to create jobs across the country particularly for the low skilled if labour intensive units can be promoted;

iv. Can ease pressure on metros by creating new centres of employment;

V. Can ensure that risks of failure are minimised due to the stake holder interest of the private investor;

vi. Domestic companies computing to set up units in the SEZs can have easier access to funds from foreign and Indian banks;

vii. Can bring down transaction costs for companies;

viii. Can make units competitive through flexible labour laws; and

ix Can bring in along with foreign investment, technology and managerial talent. The major arguments made against SEZS are that the SEZs:

1. Lead to exploitation of the policy by fly-by-night developers:

ii. Could result in significant revenue losses for governments;

iii Divert large tracts of farmland into non-performing SEZS;

iv. Result in domestic markets becoming under-served;

V. Not produce world-class facilities in all cases;

vi. Not guarantee the future of units in unsuccessful zones;

vii. Distort taxation structure, making domestic units uncompetitive in comparison;

viii. May not be WTO-compatible all the time.