Development of Enterprises and Services Hub (DESH) Bill, 2022: The Department of Commerce recently organized a Workshop on Development of Enterprises and Services Hub (DESH) Bill, 2022 in Vanijya Bhawan, New Delhi.

Key Highlights:

• The workshop was organized under the Chairmanship of Shri BVR Subrahmanyam, IAS, Commerce Secretary in partnership with Export Promotion Council for EOUs and SEZs (EPCES).
• It was organized to have discussion on the DESH Bill with stakeholders from various segments. 
• The workshop witnessed the attendance of approx. 200 participants who represented various segments including SEZ Units, Developers and Government functionaries of many State Governments as well as Central Government Departments as well as prominent industry associations.

What is DESH Bill?

• The revamped law for Special Economic Zones (SEZs) is also known as Development (Enterprise and Services) Hub (DESH) Bill, 2022.

Key Points:

• The Government of India (GoI)  plans to facilitate easier financing norms to activities pertaining to the manufacturing and services hubs envisaged under the proposed revamped law for Special Economic Zones (SEZs), also known as Development (Enterprise and Services) Hub Bill, 2022.
• This will be done by giving them infrastructure status, at par with sectors such as airports, road, rail waterways, to improve access to finance and enable long-term borrowing from lenders at easier terms.

Key provisions of the Bill:

• The new draft DESH Bill seeks to set up “development hubs” for promoting economic activity, generating employment, integrating with global supply and value chains.
• It also seeks to maintaining the manufacturing and export competitiveness, developing infrastructure facilities, promoting investments, including research and development(R&D).
• Such hubs will also include existing SEZs.
• These development hubs will be further classified into enterprise and service hubs.
• While enterprise hubs will permit both manufacturing and services activities, services hubs will permit only services activities.
• The government plans to make financing requirements for hub-related manufacturing and services businesses easier.
• The new bill will replace the existing law governing SEZs.

Objective:

• The major objective is to establish massive manufacturing and investment hubs that go beyond an export-focused strategy, comply with World Trade Organization (WTO) norms, have access to the domestic market, and facilitate simple entry and exit of units

Significance of the Bill:

Paradigm Shift:

• The Bill is anticipated to result in a paradigm shift, by shifting the emphasis from exports to domestic investments, removing procedural and regulatory obstacles, and incorporating numerous economic zone concepts, including SEZs, coastal economic zones, and food and textile parks.

Boosting Business Activity:

• By transforming the existing SEZs into enterprises and service hubs, the emphasis will be on growing economic activity and the domestic market, integrating the various models, improving ease of doing business, and creating jobs.

Larger role for States:

• State boards would be established to play a greater role in integrating all the existing industrial parks within states with the existing SEZs across the country.

Online Portal for Approvals:

• Under the DESH legislation, an online single-window portal for the grant of time-bound approvals for establishing and operating the hubs will be provided.

Tax benefits:

• In a manner similar to the current SEZs but without an export compulsion NFE mandate, the new bill is envisaged to ensure tax rebates, refunds, and financial assistance to developers and enterprises in the hub.

Transformation of Hubs:

The existing ports, airports, inland container depots, land stations, etc., are proposed to be transformed into Development Hubs with distinct boundaries between processing and non-processing sectors.

Background:

The announcement of a new law was made by Finance Minister Nirmala Sitharaman in the Union Budget 2022-23 in February.