Previous Year Question
The SEZ (Special Economic Zone) Act, 2005, which came into effect in February 2006, has certain objectives. In this context, consider the following:
Development of infrastructure facilities.
Promotion of investment from foreign sources.
Promotion of exports of services only.
Which of the above is/are the objective(s) of this Act?
1 and 2
Only 3
2 and 3
1, 2 and 3
Correct Answer: A
Detailed Solution
The Special Economic Zones Act, 2005 came into force on 10 February 2006. Section 5 of the Act specifies the principal considerations and objectives connected with the establishment and operation of Special Economic Zones.
Statement 1 is correct: Development of infrastructure facilities is expressly included among the objectives of the Act. Such infrastructure can include roads, electricity, communications, storage, transportation and other facilities needed by SEZ units.
Statement 2 is correct: Promotion of investment from both domestic and foreign sources is an objective of the Act. Therefore, the reference to investment from foreign sources is correct.
Statement 3 is incorrect: The Act seeks to promote exports of both goods and services, not services alone. The restrictive word “only” makes the statement incorrect.
The objectives stated under Section 5 include:
generation of additional economic activity;
promotion of exports of goods and services;
promotion of investment from domestic and foreign sources;
creation of employment opportunities; and
development of infrastructure facilities.