A Workshop on Development of Enterprises and Services Hub (DESH) Bill, 2022 was organized by Department of Commerce on August 29 in Vanijya Bhawan, New Delhi under the Chairmanship of Shri BVR Subrahmanyam, IAS, Commerce Secretary to have discussion on the DESH Bill with stakeholders from various segments.
Key Points
- The draft DESH Bill was borne out of the learnings from the operations of SEZ law over more than a decade as well as from feedback from the stakeholders.
- This was followed by a presentation providing a brief overview on the draft DESH Bill. DESH Bill aims to overhaul special economic zones (SEZ) legislation.
- DESH legislation has a much wider objective of boosting domestic manufacturing and job creation through development hubs.
- The SEZ Rules, 2006 came into effect on 10th February, 2006 amid much fanfare. Till mid-June 2022, 378 SEZs were notified. And of them, till March this year, 268 SEZs were operational. Rest were de-notified.
- Exports from these SEZs have fallen to $102.3 billion in FY21, from $112.3 billion in FY20. They account for less than 20% of exports now.
- Set up to fulfil India’s plan of becoming a manufacturing powerhouse, these special zones fell short of expectations as the competitive advantage waned and several direct tax benefits were withdrawn.
- A WTO panel had in 2019 said that incentives given to entities located in SEZs violated the agreement on subsidies.
- So now, the government has decided to overhaul the SEZ rules with DESH bill.
- The government has proposed to create developmental hubs, whose focus is not limited to exports, but also to cater to the domestic markets.
- The customs duty would only be paid on the inputs used and not on the expensive final goods.
- The Bill seeks to integrate existing industrial estates such as textiles and food parks by converting them into developmental hubs.
- The DESH Bill classifies two types of developmental hubs — Enterprise and services hubs.
- The enterprise hubs will have land-based area requirements and be allowed for both manufacturing and services activities, services hubs will have built-up area requirements and be allowed for only services-related activities.
- These hubs, which will come up under the regional boards of states, could be created by Centre or states or jointly by both or by any goods and services provider.
