AI-generated practice question — model-generated for extra practice, not a previous-year CBSE board question.
(B) Attract foreign companies to invest and produce in India
SEZs are industrial zones set up by the government with world-class facilities where companies get tax exemptions for five years to attract foreign investment and boost production.
Source: Globalisation and the Indian Economy, Chapter 4 — Steps to Attract Foreign Investment
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The passage clearly states: "Industrial zones, called Special Economic Zones (SEZs), are being set up… Companies who set up production units in the SEZs do not have to pay taxes for an initial period of five years." This is listed under "Steps to Attract Foreign Investment," confirming option B is correct. Options A, C, and D are not mentioned anywhere in connection with SEZs. For MCQs, briefly justifying your answer (as done above) can earn full marks and shows conceptual clarity.