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Tax net on SEZs damaging India

A recent report by Public Accounts Committee (PAC) presented in Parliament recommended setting up an effective and reliable oversight mechanism for monitoring actual net foreign exchange in Special Economic Zones (SEZs). It says that this mechanism is required for prompt recovery of duty forgone or evaded and also to provide a deterrent penal provision for willful default.

There is no denying the fact that it is very important to monitor the working of SEZ units and check them for duty evasion or misuse of SEZ policy. But at the same time what is also important is that SEZs will not be harmed or disabled in any way but it will dampen the scope of foreign investments in India.

The Minimum Alternate Tax (MAT) on Special Economic Zones (SEZs) introduced in the 2011 Union Budget did just that. Placing SEZs under the purview of MAT effectively takes away all tax concessions and benefits promised to investors for investing in SEZs.  This not only imperils their existing projects that were established on the basis of earlier promised tax benefits and concessions but potentially throws cold water on any plans of future investments in India.



The Indian investment environment has gone from bad to worse. With retrogressive taxation policies, the policymakers are only jeoparadising India’s image as a promising investment destination. Honestly, I did not expect this from a government which pioneered progressive policies such as the RTI Act.

The government, however, seems to have been shaken out of its reverie by being forced to relook into the archaic policies owing to rising criticism from all quarters. The setting up of the Shome Committee underscore the same.  Maybe relooking at its policy on retrospective tax, imposing taxes on SEZ units in various sectors will follow suit after GAAR (General Anti-Avoidance Rules). This becomes all the more necessary given the recent reports of many investors stalling their projects and withholding plans of future investment in India owing to government’s unexpected and reckless policy regime.


Burden on middle class

Fresh taxes introduced by the Punjab Government will increase the burden on the salaried class (News report “Fresh Taxes must for growth: CM”, September 4). Rich people can buy houses, cars, clothes, accessories and petrol by shelling out few extra bucks, but what about the middle class which dominates the Punjab population. They cannot envisage buying a new house, jewellery, cars as it has become thornier for them to meet both ends meet.

It is high time that the youth and the educated middle class of Punjab rise to the occasion. They should make the government realise that people are still aware of their rights and can take away the power to rule which they have vested in the Badals’ hands. The Centre should take charge of levying taxes from the moneyed class.

Akalis have done nothing to improve the deteriorating economic condition of Punjab. Uncomfortable questions must be answered by the ruling class. When Punjab is under the burden of debt, the rulers are going on foreign trips, buying properties in other states and abroad, etc.



The decision taken by the Punjab Government to increase the retirement age of its employees from 58 to 60 (re-employment) is unrealistic and mindless. The liability of the government will be much more after two years than now.

At least 4 persons can be employed against the salary of one retiring employee and the new appointees will be well-qualified. When the Badal government has not been able to improve the financial position of the state in the past 5-6 years, from where will the funds come in the next 2 years.

HN SINGH, Patiala

Nation’s pride

All right-thinking citizens surely do not like Parliament being converted into a fish market. The persons with obstructionist attitude and fissiparous tendencies can hardly be expected to see with clarity the national goals and people’s aspirations. Those who are bent upon exploiting regional sentiments cannot vouchsafe for national unity and interest. Parliament is a forum for debate reflecting the collective wisdom and the essence of a nation’s pride.


No balancing act

In our country, we have seen rains paralysing normal life due to poor drainage system, sewage blockade and unplanned urban areas. We have been unable to harvest rain water and failed in water conservation and making it potable after treatment.

Metropolitan cities have huge crisis of drinking water and the water table in many states is going down day by day. Urbanisation and increasing population will continue to play havoc with natural resources. Our policy makers have failed to implement advanced techniques to balance the excess and shortfall of water in a well planned manner in the entire country.




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