The DESH Bill, announced in the Union Budget this year, seeks to help generate more employment opportunities and revenue apart from preventing migration of key business functions to other countries, including China and the Philippines. However, its implementation is taking longer despite all the stakeholders already convinced about its benefits to the economy and businesses.
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Institutional investors with exposure to SEZs and realty developers have held multiple meetings with the central government, especially the Ministry of Commerce and Industry. They have also made presentations to the government with regards to the department’s apprehension over revenue loss. The DESH Bill or amendments to SEZ rules will allow domestic businesses to operate from these economic hubs.
Lack of clarity on final implementation of the bill has delayed effective development in SEZs, leading to gross underutilization of space.
“A paradigm shift in the way business is conducted for the service units is required, which can come from implementation of recommendations of the Baba Kalyani Committee constituted for the SEZ review,” said Sigrid Zialcita, chief executive, Asia Pacific Real Assets Association (APREA ). “Modifications such as co-existence of export-oriented and domestic business units within common premises will be a definitive game changer for India.”
According to her, early implementation of the suggestions with minimal financial implications will help in boosting the economy’s growth trajectory.
APREA represents global real estate investors including prominent pension, insurance and sovereign wealth funds, investment managers, family office platforms, developers, and professional firms.
Industry experts are of the view that the DESH Bill is poised to be a win-win for all including the government, businesses, and job seekers. With it, more employment can be created, leading to more revenue, and all stakeholders including technology companies will get more flexibility.
“We have not asked for any concession, all we need is co-existence of SEZ and non-SEZ in the same unit, and rupee billing so that the unit can start doing domestic business. There is a need for flexibility to choose, without any revenue loss,” said the CEO of an SEZ development company.