Special Economic Zones.

I used to get excited every time a new SEZ was opened in India thinking that it was going to attract more Foreign Direct Investment. This was until today when I read an article by the IMF Chief Economist Raghuram Rajan on how much of tax revenue was being lost on account of SEZ’s. In fact Rajan goes to the extent of saying that SEZ’s would result in unequal distribution of the Indian economy. So clearly, there is more than what meets the eye when Governments tout about opening of new SEZ’s.

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